Effects of carbon nanotubes (CNTs) on living systems such as cells are crucial for the safe development of biosensors, drug carriers, or tumor imaging agents. We report here that SWCNT-COOH inhibited cell proliferation via a nonapoptotic mechanism, which is different from effects caused by pristine CNTs. On the basis of SWCNT-COOH's perturbations on cells, expression of genes and protein, and protein phosphorylations, we conclude that SWCNT-COOH suppresses Smad-dependent bone morphogenetic protein (BMP) signaling pathway and down-regulates Id proteins. These molecular events cause cell cycle arrest at G(1)/S transition and inhibit cell proliferation. The specific suppression of BMP signaling and Id proteins by SWCNT-COOH demonstrates nonapoptotic effects of functionalized CNTs on human cells. This finding may have potential therapeutic applications to treat human diseases related to Id proteins or BMP signaling such as breast cancer and bone diseases.