We have used amido-amine functionalized carbon nanotubes (CNTs) that form covalent bonds with cross-linked epoxy matrices to elucidate the role of the matrix-filler interphase in the enhancement of mechanical and thermal properties in these nanocomposites. For the base case of nanocomposites of cross-linked epoxy and pristine single-walled CNTs, our previous work (Khare, K. S.; Khare, R. J. Phys. Chem. B 2013, 117, 7444-7454) has shown that weak matrix-filler interactions cause the interphase region in the nanocomposite to be more compressible. Furthermore, because of the weak matrix-filler interactions, the nanocomposite containing dispersed pristine CNTs has a glass transition temperature (Tg) that is ∼66 K lower than the neat polymer. In this work, we demonstrate that in spite of the presence of stiff CNTs in the nanocomposite, the Young's modulus of the nanocomposite containing dispersed pristine CNTs is virtually unchanged compared to the neat cross-linked epoxy. This observation suggests that the compressibility of the matrix-filler interphase interferes with the ability of the CNTs to reinforce the matrix. Furthermore, when the compressibility of the interphase is reduced by the use of amido-amine functionalized CNTs, the mechanical reinforcement due to the filler is more effective, resulting in a ∼50% increase in the Young's modulus compared to the neat cross-linked epoxy. Correspondingly, the functionalization of the CNTs also led to a recovery in the Tg making it effectively the same as the neat polymer and also resulted in a ∼12% increase in the thermal conductivity of the nanocomposite containing functionalized CNTs compared to that containing pristine CNTs. These results demonstrate that the functionalization of the CNTs facilitates the transfer of both mechanical load and thermal energy across the matrix-filler interface.