A novel poly(phenyleneethynylene)/single walled carbon nanotubes (SWNTs) donor-acceptor nanohybrid system was constructed based on the bulk heterojunction concept, and their photovoltaic (PV) properties were studied. Comparing with that of the pristine polymer poly(phenyleneethynylene) (PPE) device, the PV performance of the SWNTs/PPE hybrid is dramatically improved. The origin of open-circuit voltage (V(oc)) of the pristine polymer PPE device and SWNTs/PPE device was explained by metal-insulator-metal (MIM) diode model and pinning mechanism, respectively. Furthermore, incorporation of sensitizing groups to the side chain of PPE has great effect on the photovoltaic cell performance based on these hybrid materials and both the short-circuit current density (I(sc)) and power conversion efficiency are significantly enhanced. It is proposed that the main reason for the increase of short circuit current is due to efficient transfer of holes by sensitizer to PPE backbone and the transfer of electrons to the SWNTs. The power conversion efficiency is enhanced by approximately 1 order magnitude to 0.031% for the device based on the PPE3 with anthracene sensitizer group on the side chain compared with that (4.2 x 10(-3)% for SWNTs/PPE1 and 6.2 x 10(-3)% for SWNTs/PPE2) of the device without anthracene sensitizer on the side chain.