The present study concerns the influence of hydroxyl functionalized multi-walled carbon nanotubes (MWCNTs) on the mode I interlaminar fracture behavior of carbon fiber-reinforced epoxy composites. Three different weight percentages of 0.1, 0.2, and 0.3% of MWCNTs were dispersed in epoxy resin through the sonication and mechanical mixing process. The 16-layer composite panels were made using a traditional hand lay-up method followed by a vacuum bagging process. A double cantilever beam was prepared according to the ASTM standard and subjected to a quasi-static test with a loading rate of 5 mm/min. It has been discovered that the addition of MWCNTs to bulk epoxy improves the fracture toughness of the composite proportionally. The fracture toughness for 0.1, 0.2, and 0.3% MWCNTs reinforced composites was improved by 7.9, 47.7, and 5.8% compared to the pristine composites. The improvement of the fracture strength is attributed to the improved adhesion between the fiber and matrix and the effective dispersion of carbon nanotube in the epoxy resin. The addition of MWCNTs, however, made the interface brittle, observed from the load–displacement behavior. The experimental results are validated using a bilinear cohesive zone model and confirm the improvement of interlaminar fracture toughness with the addition of MWCNTs.