In this study, the tensile properties and fracture analysis of functionalized carbon nanotubes (CNTs) with carbene are investigated employing the molecular dynamics simulations. Tensile parameters, i.e., Young’s modulus, ultimate stress, failure strain, and fracture progress, are determined, and the effects of different attachment types, distribution patterns, the weight percentage of functional groups as well as the presence of defect with various defect weights on the aforementioned values are explored. According to the results, the tensile parameters are highly sensitive to the attachment type of carbene. In general, functionalization reduces the value of tensile parameters, especially when the attachment of carbene to base CNT is perpendicular to the loading direction. Compared to the ultimate stress and the failure strain, Young’s modulus is shown to be less affected by functionalization. It is demonstrated that the presence of defect, regardless of functionalization type and distribution pattern, reduces the tensile parameters. This reduction is more pronounced in the case of ultimate stress. Moreover, it is found that the toughness of CNTs reduces by functionalization and the presence of defects. Finally, it is demonstrated that functionalization with carbene and the presence of defects does not have a noticeable effect on the fracture progress of CNTs.