Carbon nanotubes (CNTs), members of the nanomaterial family, are increasingly being used in consumer products and extensively studied for various biomedical applications. Due to their benign elemental composition, large surface area, and chemical and biological activities, CNTs demonstrate great potential in cancer therapy, including drug delivery, imaging analysis, photothermal therapy, photodynamic therapy, and radiotherapy. However, there is still a major knowledge gap when it comes to transitioning from research to clinical applications. One of the important issues is that the biological toxicity of CNTs, especially in terms of carcinogenesis, and the underlying mechanisms are not fully understood. Therefore, a thorough evaluation of toxicity and the underlying mechanisms of carcinogenesis is essential to enable the wide application of CNTs. In this review, we summarize the recent progress of CNTs as multifunctional therapeutics in cancer therapy. Furthermore, a detailed discussion is provided on the carcinogenesis and potential mechanisms of CNTs. Finally, the review ends with further challenges and prospects for CNTs with the expectation of facilitating their broader utilization.