Multiwalled carbon nanotubes (MWCNTs) have been used in biomedical applications due to their ability to enter the cells. Carboxylic functionalization of MWCNT (MWCNT-COOH) is used to mitigate the toxicity of MWCNTs. Our study focuses on comparing the toxicity of MWCNT and MWCNT-COOH on the neuronal cells, LN18. Concentrations of 5, 10, 20, and 40 µg ml⁻¹ were used for the study, and cytotoxicity was determined at 0, 1, 3, 6, 12, 24, and 48 h of incubation. Cell viability was assessed by Trypan Blue, MTT, and Live dead cell assays, and the oxidative stress produced was determined by reactive oxygen species (ROS) and Lipid peroxidation assays. MWCNT-COOH showed higher cell viability than MWCNT for 20 and 40 µg ml⁻¹ at 24 and 48 h. This was also visually observed in the live dead cell imaging. However, at 48 h, the morphology of the cells appeared more stretched for all the concentrations of MWCNT and MWCNT-COOH in comparison to the control. A significant amount of ROS production can also be observed at the same concentration and time. Viability and oxidative stress results together revealed that MWCNT-COOH is less toxic when compared to MWCNT at longer incubation periods and higher concentrations. However, otherwise, the effect of both are comparable. A concentration of 5–10 µg ml⁻¹ is ideal while using MWCNT and MWCNT-COOH as the toxicity is negligible. These findings can further be extended to various functionalizations of MWCNT for wider applications.