Molecular dynamics modeling shows that multiwall carbon nanotubes (MWCNTs) with sp(3) interwall bonding have strengths exceeding those of single-wall carbon nanotubes (SWCNTs) containing the same size initial intrawall defect, and are far less sensitive to defect size. Thus, although processing methods used to increase interwall coupling also create intrawall defects, analyses here show that the strengthening effects and enhanced load transfer compensate for the creation of defects and make MWCNTs with interwall bonding preferable to SWCNTs as mechanical reinforcements in composites. These results are consistent with new experimental data and suggest a new design methodology for CNT-based composites.