The interest of eco‐friendly polymer nanocomposites is continuously growing because of the increased concern about environmental pollution. Polycaprolactone (PCL) is one of the extensively used bio‐degradable polymers. The advantage of this biopolymer is further enhanced by the addition of nanofillers and developing nanocomposites. Carbon Nanotube (CNT) is one of the best matching nanofillers, the inclusion of CNT in PCL matrix increase the use of PCL in diverse areas. In this work PCL/CNT nanocomposites prepared by the electrospinning technique, in order to avoid CNT agglomeration, acid functionalized CNT (f‐CNT) is used. Morphological properties of the electrospun nanofiber are studied by SEM and the interaction between PCL and f‐CNT is studied by FT‐IR. DSC and optical microscopic studies reveal the influence of f‐CNT's to enhance the crystallinity and reduce the lamellar thickness and spherulite growth of PCL. The H‐bonded interaction between PCL and f‐CNT enhances the physical properties of bio‐degradable PCL and thereby enhances its commercial application.