This paper describes a novel general strategy for fabricating protein-polyion multilayers by electrostatic layer-by-layer (LBL) self-assembly on carbon nanotube templates. Such a noncovalent functionalization method is important for preserving the activity of biomolecular, the mechanical, and electrical properties of carbon nanotubes. Glucose oxidase and poly(diallyldimethylammonium) chloride polymer (PDDA) were used as models to investigate the LBL process on CNT templates. High-resolution TEM and electrochemical characterization confirm the formation of LBL nanostructures on carboxyl functionalized carbon nanotubes. We have also demonstrated the applications of these nanoshell bioreactors to direct electrochemistry of protein and biosensing. This strategy can be applied to assemble other biological molecules such as antibody, antigen, and DNA for wide bioassay applications.