CNT nanofluid shows better heat transfer rate due to their high thermal conductivity. Due to hydrophobic nature of CNT, preparation of stable nanofluid is a major challenge. Here nanofluid was prepared using modified two-step method using multi-walled CNT as nanomaterial, double distilled water as base fluid and SDS as surfactant. CNT concentration was varied from 0.1 to 0.3 wt%, surfactant/CNT ratio from 1 to 3 and ultrasonication time from 0 to 180 min. The results indicate that ultrasonication time and surfactant/CNT ratio have a significant effect on the dispersion of CNT in surfactant water solution. Prepared CNT nanofluid was found to be stable for a longer duration.