Here we show that the transport properties and electrochemical performance of polyelectrolyte membranes are improved through the dispersion of chitosan-wrapped carbon nanotubes, for direct methanol fuel cell applications. Methanol permeability is reduced via improving the interfacial interactions and the solubilization of CNTs in the Nafion matrix, as well as inducing the formation of long-range oriented conduction pathways in the vicinity of the decorated one-dimensional nanostructure. The improved membrane selectivity results in a considerably enhanced fuel cell efficiency (16% vs. 11%) and a power generation capacity more than two times higher (110 mW cm−2vs. 47 mW cm−2) in a concentrated methanol solution (5 M), in comparison with the commercial Nafion®117 membrane.