In this study, two types of multi-walled carbon nanotubes (pristine, p-CNT and functionalized, f-CNT) were dispersed in water by sonication and then added to cement mortar. The purpose of this study was to characterize the dispersion degree of the CNTs in aqueous suspension and to investigate whether achieving dispersion in water would also result in dispersion inside mortar. Dispersion of the CNTs in water was investigated by means of UV–vis spectroscopy, using different CNT concentrations and sonication durations. Dispersion of the CNTs in cement mortar was investigated by measuring the compressive and flexural strength and fracture toughness as well as the microstructural characterizations of scanning electron microscopy and mercury intrusion porosimetry. The effects of the CNT addition on drying shrinkage and cement hydration were also investigated for cement pastes. The results of UV–vis spectroscopy showed that by increasing the sonication time to 120 min, the dispersion degree of the f-CNT suspension increased progressively, while for p-CNT, a maximum was reached with 60 min of sonication. The compressive and flexural strength and fracture toughness of mortars containing f- and p-CNTs were not significantly improved either by increasing the amount of CNT or imposing sonication in mixing water. High CNT dispersion in cement matrix was not equally obtained by utilizing highly dispersed CNT suspension. Sonication of f- and p-CNT led to a remarkable deceleration of cement hydration in the first hour of hydration and drying shrinkage of the cement composites was found to be reduced by f- and p-CNT addition.