The effects of incorporating MWCNT in an aerospace-grade high functionality epoxy resin system are reported. Oscillatory-shear rheology showed as-received MWCNT (AR-MWCNT) to have a low degree of interaction with the resin, and consequently G′ values were low, whereas G′ values for functionalized MWCNTs (amino and oxidised) were higher due to increased resin-nanotube interactions. The three approaches used to obtain rheological percolation thresholds all showed values to increase in an order reflecting the improved MWCNT dispersion imparted by functionalisation. Analysis using colloidal dispersion theory fitted better with the experimental data than statistical percolation theory, and more closely mirrors the clustering of MWCNT agglomerates to form a percolated network. Fracture studies showed toughness decreased with AR-MWCNT addition, whereas for functionalised MWCNT addition toughness increased. For AR-MWCNT nanocomposites, nanotube debonding predominated and large weakly-bonded agglomerates were formed which reduced fracture toughness. In contrast, functionalised MWCNTs mainly exhibited fracture and pull-out and formed smaller agglomerates which toughened the matrix via crack-deflection and pinning.