Different mixing processes and conditions give rise to significant differences in the agglomeration and deagglomeration of nanoparticles and how they are distributed and dispersed within a polymeric matrix. Homogeneities in spatial distribution and effective nanoparticle dispersion are necessary to achieve optimal polymer nanocomposite properties. While it is generally understood that CNT agglomerates can be broken down and the nanotubes separated from each other during the earlier stages of mixing and processing, there have been several reports which suggest CNTs can be either damaged or demixed into various agglomerate shapes and sizes during subsequent deformation and processing. The focus of the current work is the identification of optimal mixing conditions for dispersion of CNTs and the impact of ultrasonication conditions on the dispersion and distribution of CNTs in the polymer nanocomposite. Here polymer nanocomposite samples of poly(caprolactone) (PCL) were compounded with carbon nanotubes (CNTs) using a solution processing technique where the samples are subjected to different durations of CNT/solvent (Stage 1) sonication. In addition to more standard and commonplace characterization techniques, an analysis of the mixing indices and the shear-induced crystallization behavior of the polymer nanocomposites were used to study the effects of sonication time on nanoparticle dispersion within the samples. In particular, shear-induced crystallization has been shown to be highly sensitive to nanoparticle dispersion as the crystal nucleation is triggered by the tremendous amount of surface area provided by the embedded nanoparticles. Overall, various characterization results suggest that effective properties initially increase and then reach an optimum state as a function of processing time, after which further sonication leads to a decrease in the corresponding properties. Findings from TEM evidence of CNT damage, optical image analysis and the shear-induced crystallization behavior of the samples suggest that mechanisms of demixing and damage of the CNTs co-exist and are responsible for the reduction in effective properties at excessive sonication times.