Since their discovery at the end of the previous millennium, carbon nanotubes (CNTs) have been the object of thousands of papers describing their applications in fields ranging from physics to electronics, photonics, chemistry, biology and medicine. The development of chemical approaches to modify their graphitic sidewalls enabled the generation of polyethylene glycol (PEG)-modified CNTs and their exploration in multiple biomedical applications. Studies at the cellular and organism level revealed that PEG-modified CNTs have favorable pharmacokinetic and toxicology profiles. Recently, PEG-modified CNTs have been successfully tested in preclinical studies in the fields of oncology, neurology, vaccination and imaging, suggesting that they are well suited for the generation of novel multifunctional nanodrugs. Here we will describe published data about the application of PEG-modified CNTs as in vitro and in vivo therapeutic and imaging tools, and what is known about the interaction between PEG-modified CNTs and biological systems. Although several pieces of the puzzle are still missing, we will also formulate a preliminary structure-function model for PEG-modified CNT cellular trafficking, disposition and side effects.