This work explores the mechanical, thermal, and tribological characteristics of carbon fabric reinforced epoxy (CF-Ep) composites filled with halloysite nanotubes (HNT). The mechanical properties were evaluated, including hardness, interlaminar shear strength (ILSS), tensile strength, and flexural strength. The enhanced curing and even dispersion of HNTs in the epoxy matrix were validated by DSC, FTIR, and SEM measurements. Thermogravimetric analysis (TGA) and dynamic mechanical analysis (DMA) demonstrated improved thermal stability and damping, especially for the 0.75 wt.% HNT composite. Tribological performance was investigated utilizing a pin-on-disc configuration (60 N, 3 m/s) and silica sand (212 µm, 30 N, 2.38 m/s) under three-body abrasion and dry sliding wear, respectively. Hardness was highest at 1.75 wt.% HNT, and wear resistance and mechanical performance were best at 0.75 wt.% HNT composite. Surface damage, including matrix separation, micro-ploughing, and fragmentation, was lessened in 0.75 wt.% HNT composites, according to scanning electron microscopy worn surfaces. Using Minitab 17 and the Taguchi approach, wear experiments was created using an L16 orthogonal array. There were four levels of variation in three factors: load (10–40 N), abrading distance (250–1000 m), and HNT content (0–2.75 wt.%). The most important variables influencing wear volume loss were found to be load + distance and load + filler interactions using ANOVA and regression analysis. Scanning electron microscopy revealed that H0.75% HNT-filled composites had the best resistance to wear because they showed less surface damage mechanisms, such as fragmentation, micro-ploughing, and matrix detachment, when they were worn-out by dry sliding or abrasion. Overall, by strengthening interfacial bonding, improving load transfer, and creating a protective tribolayer that decreased material loss and surface damage during abrasion, HNTs improved mechanical and wear properties. Specifically, the 0.75 wt.% HNT composite showed outstanding heat stability and wear resistance, which made it a good option for high-performance uses such as power plant chute and automobile liners.