Inclusion of multi-walled carbon nanotubes (MWNTs) into tissue prior to laser therapy has the potential to enhance the selectivity and effectiveness of cancer therapy by providing greater and more controlled thermal deposition. The purpose of this study was to investigate the optical and thermal response of tissue representative phantoms containing MWNTs to optical radiation. Tissue representative phantoms 20 mm in diameter and 1 mm in thickness were created from sodium alginate. Following the inclusion of MWNTs (900 nm in length, 40–60 nm in diameter) in phantoms, the distribution of MWNTs was observed using transmission electron microscopy. A predominantly, evenly dispersed and randomly oriented distribution of MWNTs was observed with a rare presence of MWNT clustering or clumping. In order to characterize the response of MWNT inclusion on optical properties of phantoms, the transmittance and reflectance spectra of phantoms with and without MWNT inclusion were measured with a spectrophotometer over a wavelength range of 200–1400 nm. Inclusion of MWNTs in phantoms dramatically enhanced light absorption across the entire wavelength range as evidenced by a diminished transmittance and reflectance compared with phantoms without MWNTs. In order to evaluate the spatiotemporal temperature distribution associated with laser irradiation of phantoms with and without MWNTs, the temperature was measured at discrete radial distances from the center of the incident laser beam using thermocouples. The rate of temperature increase and peak temperature for phantoms containing MWNTs was much greater compared with phantoms without MWNTs at all measurement locations. In conclusion, MWNT inclusion in tissue phantoms increases the optical absorption and temperature elevation, which may enable more effective photothermal therapies of human disease utilizing lasers.