Rare earth modified acidified carbon nanotubes were prepared by functionalization of acidified carbon nanotubes with different concentrations of LaCl3. The modification results were characterized by Fourier-transform infrared and X-ray photoelectron spectroscopy. The rare earth successfully increases the surface activity of the acidified carbon nanotubes. Polymer matrix composites were prepared by using the rare earth modified acidified carbon nanotubes as the reinforcement in epoxy matrix. Mechanical properties were analyzed by Zwick Z100 testing machine and the tribological behaviors were test by multifunctional tribological tester. Compared with pure epoxy (epoxy resin), the mechanical strength of the best composite sample was increased by 50–120%, the coefficient of friction was reduced by 19.4% and the wear rate was reduced by approximately 40 times. The experimental results show that the RE concentration of 0.2–0.3 wt% has the most obvious influence on the properties of polymer composites. The mechanism of rare earth reinforcement in polymer matrix is analyzed and suggested.