The effect of carbon nanotube (CNT) damage on the mechanical properties of aluminium (Al)–CNT composites is investigated using mildly and severely damaged CNTs. Composites prepared with mildly damaged CNTs are found to have 97.5% higher strength and 14.2% higher modulus than pure Al. Increased carbide formation – due to the damage sustained – is observed and is believed to be in the form of isolated secondary particles within the matrix which do not contribute to enhancing the Al–CNT bonds. The strength and modulus of composites with severely damaged CNTs are found to be higher by 71% and 3.3% than pure Al, suggesting that even fragmented CNT particles can contribute to enhancing the strength and modulus of the Al matrix. The results are analyzed in light of strengthening mechanisms expected to be playing different roles in Al–CNT composites. The enhancement in strength is believed to be mainly due to matrix strengthening mechanisms and is not affected by CNT damage whereas the gain in Young’s modulus is due to load transfer to the CNTs and accordingly is more significant in the case of the mildly damaged CNTs which have retained their tubular structure and high aspect ratio.