Bioapplications of carbon nanotubes have been predicted and explored ever since the discovery of these one-dimensional carbon allotropes. Indeed, carbon nanotubes have many interesting and unique properties potentially useful in a variety of biological and biomedical systems and devices. Significant progress has been made in the effort to overcome some of the fundamental and technical barriers toward bioapplications, especially on issues concerning the aqueous solubility and biocompatibility of carbon nanotubes and on the design and fabrication of prototype biosensors. In this article we take a comprehensive look at the advances in this fast-moving and exciting research field. We review the current status of available methodologies for the aqueous dispersion and solubilization of carbon nanotubes, discuss the results on modifications of carbon nanotubes with various biological and bioactive species, and highlight some of the recent achievements in the fabrication and evaluation of carbon nanotube-based bioanalytical devices.