Nanoparticle fluid suspensions were prepared using photochemically functionalized multiwalled carbon nanotubes in polar base fluids. Multiwalled carbon nanotubes prepared by catalytic chemical vapour deposition technique have been functionalized by irradiating with ultraviolet light of wavelength 254 nm. The photochemical oxidation of multiwalled carbon nanotubes under UV irradiation introduces oxygen containing functional groups onto the surface of the nanotubes, generating new defects on their structure. Silver nanoparticles have been deposited over multiwalled carbon nanotubes by chemical method. The enhancement in thermal conductivity of the prepared nanofluids using functionalized multiwalled carbon nanotubes and Ag nanoparticles deposited functionalized multiwalled carbon nanotubes with volume fraction, temperature and aspect ratio has been demonstrated. Silver deposited functionalized multiwalled carbon nanotubes based nanofluids in DI water with 0.02% volume fraction exhibit a thermal conductivity enhancement of 9.9% and 47% at room temperature and at 50°C respectively. Copyright © 2012 American Scientific Publishers.