Ionic liquids are nonvolatile solvents and have high ionic conductivity. They can be used as stable electrolyte in many electrochemical systems. But their application is impeded by their high viscosity. This paper reports a novel method to reduce the viscosity of an ionic liquid, 1-propyl-3-methylimidazolium iodide (PMII) that is extensively used in dye-sensitized solar cells (DSSCs), by the addition of carboxylic group-functionalized multi-walled carbon nanotubes (oMWCNTs). The viscosity of PMII can decrease from 1380cP to 400cP at 25°C after the addition of 0.10wt% oMWCNTs. The viscosity reduction depends on the oMWCNT loading. Unfunctionalized MWCNTs hardly reduce the viscosity of PMII. The viscosity decrease is attributed to the reduction in the Coulombic attractions between the PMI+ cations and I− anions as a result of the hydrogen bond formation between PMI+ and carboxylic group of oMWCNTs. The presence of oMWCNTs gives rise to the increase in the size disparity of cations to anions of PMII and induces disordered structure. The addition of oMWCNTs does not affect the thermal stability of PMII. PMII–oMWCNT mixtures with reduced viscosity are used as the electrolyte of DSSCs. The addition oMWCNTs in the ionic liquid can significantly improve the photovoltiac efficiency of DSSCs. This is the first time to observe the viscosity reduction of ionic liquid by carbon nanotubes.