This article reviews the recent development in performance and fabrication of carbon nanotubes (CNTs)‐based polymer nanocomposites synthesized by melt‐mixed process. CNTs have attracted enormous attention, since its presence (even in low concentration) causes drastic improvements in the mechanical and electrical properties of several polymer composites. It is suggested that the dispersion state of CNTs within polymer matrices is dictated by the cohesive strength of the CNTs “agglomerates.” Based on this suggestion, this review involves an in‐depth investigation on the origin of this CNTs “agglomerates” when present within polymer matrices. Attempts have also been done to investigate and correlate the varying extent of CNTs “agglomerates” in different polymer matrices. It is considered that the extent of dispersion of CNTs “agglomerates” depends on the interfacial interaction between the two phases, difference in their melt viscosities, and types of CNTs, compatibilizer and modifier used. A comprehensive study has been done on the effect of processing parameters used during melt‐mixing process; functionalization of CNTs, and the effect of compatibilizers and modifier on the final properties and morphology. Herein, an attempt has been done to study the correlation between the synthetic procedure, developed structure, and observed properties of nanocomposites of polymers and CNTs.