The ionic surfactant-assisted dispersion of single-walled carbon nanotubes in aqueous solution has been studied by Raman and fluorescent spectroscopy during ultrasonic processing. During the process, an equilibrium is established between free individuals and aggregates or bundles that limits the concentration of the former that is possible. This equilibrium is a function of free sodium dodecyl sulfate concentration. At surfactant concentrations below this value, fluorescence is shifted to a lower energy due to an increase in micropolarity from water association at the nanotube surface. The mechanism of dispersion is postulated as the formation of gaps or spaces at the bundle ends in the high shear environment of the ultrasonicated solution. Surfactant adsorption and diffusion then propagate this space along the bundle length, thereby separating the individual nanotube. The former is found to be controlling, with the use of a derived kinetic model for the dispersion process and extraction of the characteristic rate of nanotube isolation.