The filler/matrix interface in fiber-reinforced polymer composites is critical in controlling load transfer from the matrix to the fiber, failure mechanisms, and degradation. It is not clear, however, how the mechanisms of load transfer in traditional composites apply to nanofiber-filled polymers. This paper is focused on understanding the reinforcement mechanisms in multiwalled carbon nanotube (MWCNT)/bisphenol-A polycarbonate (PC) composites. Strain dependent Raman spectroscopy shows that there is load transfer from the matrix to the nanotubes, and that the efficiency of the load transfer is improved by surface modification of the MWCNT. Dynamic mechanical analysis as well as electron microscopy reveals the presence of a large annular interphase region of immobilized polymer surrounding the embedded nanotubes. Micromechanical modeling of the elastic modulus of the composite that accounts for the limited load transfer to the interior shells of the MWCNT suggests this immobilized polymer provides an additional reinforcement mechanism that is unique for nano-filled composites.