We report a novel approach for producing carbon nanotube fibers (CNF) composed with the polysaccharide agarose. Current attempts to make CNF's require the use of a polymer or precipitating agent in the coagulating bath that may have negative effects in biomedical applications. We show that by taking advantage of the gelation properties of agarose one can substitute the bath with distilled water or ethanol and hence reduce the complexity associated with alternating the bath components or the use of organic solvents. We also demonstrate that these CNF can be chemically functionalized to express biological moieties through available free hydroxyl groups in agarose. We corroborate that agarose CNF are not only conductive and nontoxic, but their functionalization can facilitate cell attachment and response both in vitro and in vivo. Our findings suggest that agarose/CNT hybrid materials are excellent candidates for applications involving neural tissue engineering and biointerfacing with the nervous system.