Carbonaceous nanomaterials are widely used in industry and consumer products, but concerns have been raised regarding their release into the environment and subsequent impacts on ecosystems and human health. Although many efforts have been devoted to understanding the environmental fate of carbonaceous nanomaterials, information about their microbial transformation is still rare. In this study, we found that within 1 month a polycyclic aromatic hydrocarbon-degrading bacterium, Mycobacterium vanbaalenii PYR-1, was able to degrade both pristine and carboxyl-functionalized multiwalled carbon nanotubes (p-MWCNT and c-MWCNT), as demonstrated by consistent results from high resolution transmission electron microscopy, Raman spectroscopy, and confocal Raman microspectroscopy. Statistical analysis of Raman spectra identified a significant increase in the density of disordered or amorphous carbon in p-MWCNT and c-MWCNT after biodegradation. Microbial respiration further suggested potential mineralization of MWCNTs within about 1 month. All of our analyses consistently showed higher degradation or mineralization of c-MWCNT compared to p-MWCNT. These results highlight the potential of using bacteria in engineered systems to remove residual carbonaceous nanomaterials and reduce risk of human exposure and environmental impact. Meanwhile, our finding suggests possible transformation of carbonaceous nanomaterials by polycyclic aromatic hydrocarbon-degrading bacteria in the natural environment, which should be accounted for in predicting the environmental fate of these emerging contaminants and in nanotechnology risk regulation.