The dispersibility of lubricant additives in water plays great roles in the performance of water-based lubrication. Here we successfully prepared fluorinated carbon nanotubes (F-CNTs) via a facile hydrothermal method. The newly obtained F-CNTs could be further modified by urea to obtain urea modified fluorinated carbon nanotubes (UF-CNTs) with hydrophilic functionalities. Abundant covalently bonded hydrophilic groups on the surface of UF-CNTs endows them with improved self-dispersed characteristic in water, which overcomes the shortcomings of hydrophobicity for both carbon nanotubes (CNTs) and F-CNTs as water-based lubricant additives. Besides, the results from friction and wear tests indicate that the addition of a small amount of UF-CNTs can significantly improve the tribological properties of pure water. Notably, a water-based lubricant with as little as 0.15 wt% UF-CNTs added exhibits excellent friction reduction and very high wear resistance performance in terms of 80.86% and 96.70% decreases in friction coefficient and wear rate, respectively, compared with pure water. The tribological investigation in this study strongly suggests that the as-prepared UF-CNTs have great potential for application as effective water-based additives for lubrication.