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Carbon nanomaterials such as graphene and carbon nanotubes possess great thermophysical properties which make them very good candidates for heat transfer application. However, the major challenge of these nanomaterials is their tendency to agglomerate and bundle together when dispersed in base fluids. This study reviews the homogeneous dispersion of these nanomaterials in aqueous solution with the aid of surfactants. The different surfactants and their characterization methods for stable dispersion of carbon nanomaterials have been examined. The influence of surfactants on the thermophysical and rheological properties of carbon-based nanofluids was also highlighted. The usefulness of noncovalent functionalization using surfactants is due to its ability to efficiently unbundle carbon nanomaterials and sustain homogeneity of the nanofluids without compromising the integrity of their structure. Sodium dodecyl sulfate (SDS), sodium dodecyl benzene sulfate (SDBS), Gum Arabic (GA), Triton X-100, and cetyltrimethylammonium bromide (CTAB) are the commonly used surfactants. Unlike SDS, SDBS, and CTAB, GA does not foam when agitated. Various authors have investigated the stability of carbon-based nanofluids. Both physical and chemical techniques have been used to stabilize nanofluids. Mixed surfactants were found to stably disperse nanomaterials at lower concentrations compared to individual surfactants. However, limited studies exist for long term stability of carbon-based nanofluids.