An investigation is performed in this research to analyze the free vibration characteristics of carbon nanotube reinforced composite (CNTRC) cylindrical panels with cutout. Distribution of CNTs in the matrix of the composite panel may be uniform or functionally graded. The cylindrical panel has a cutout at the center in a rectangular shape. Following the first-order shear deformation shell theory with the Donnell type of kinematic assumptions, the total kinetic and strain energies of the cylindrical panel are obtained. The eigenvalues problem governing the natural frequencies of the panel is established using the generalized Ritz method where the shape functions are constructed by means of the Chebyshev polynomials. Different boundary conditions such as free, simply supported, shear diaphragm, and clamped may be assumed for the edge of the panel, however, the perforation part of the panel is considered to be free all around. The obtained frequencies are first validated with the simple cases such as CNTRC plates with cutout and CNTRC panels without cutout. Afterwards novel numerical results are provided to analyze the effects of volume fraction of CNT, graded pattern of CNT, boundary conditions, panel geometry, and the hole size. Results of this study show that as the volume fraction of CNTs as reinforcement increases, the natural frequencies of the plate with/without cutout enhance. Also through a proper functionally graded distribution of CNTs as reinforcement the natural frequencies of the panel may be decreased/increased.