As a result of their unique electronic, optical, and mechanical properties, carbon nanotubes (CNTs) have been implemented in therapeutic and imaging applications. In an idealized situation, CNTs would be disposed of after they transport their theranostic payloads. Biodegradation represents an attractive pathway for the elimination of CNT carriers post-delivery and may be integral in catalyzing the release of the cargo from the delivery vehicle. Accordingly, recent research efforts have focused on peroxidase-driven biodegradation of CNTs. In this review, we not only summarize recent efforts to biodegrade CNTs in the test tube, in vitro, and in vivo, but also attempt to explore the fundamental parameters underlying degradation. Encouraged by the in vivo results obtained to date, we envision a future, where carbon-based nano-containers, which are specifically designed to target organs/cells, deliver their cargo, and biodegrade via peroxidase-driven mechanism, will represent an attractive therapeutic delivery option in nanomedicine.