A new method for preparing SWNT/epoxy nanocomposites has been developed which involves high shear mixing of the epoxy resin and SWNT and heat treating the mixture prior to introducing the hardener. The glass transition temperature of the epoxy resin is unaffected by the presence of nanotubes. An improvement of 17% in flexural modulus and 10% in flexural strength has been achieved at 0.05 wt% of nanotubes. These improvements in flexural modulus and strength are attributed to good dispersion of the nanotubes and grafting of epoxy resin to SWNT by an esterification reaction.