Thin-film saturable absorbers (SAs) are extensively used in mode-locked fiber laser due to the robust and simple application methods that arise because SAs are alignment-free and self-standing. Single-walled carbon nanotubes (SWCNTs) are the most suitable low dimensional material uesd for SAs because of their high nonlinearity and the wavelength control of absorption based on tube diameters. The most challenging problem with the use of CNT-based thin film SAs is thermal damage caused during high power laser operation, which mainly occurs due to aggregation of CNTs. We have demonstrated improved thermal damage resistance and enhanced durability of a film-type SA based on functionalization of SWCNTs, which were subjected to a mechanical functionalization procedure to induce covalent structural modifications on the SWCNT surface. Increased intertube distance was shown by X-ray diffraction, and partial functionalization was shown by Raman spectroscopy. This physical change had a profound effect on integration with the host polymer and resolved aggregation problems. A free-standing SA was fabricated by the drop casting method, and improved uniformity was shown by scanning electron microscopy. The SA was analyzed using various structural and thermal evaluation techniques (Raman spectroscopy, thermogravimetric analysis, etc.). Damage tests at different optical powers were also performed. To the best of our knowledge, a comprehensive analysis of a film-type SA is reported here for the first time. The partially functionalized SWCNT (fSWCNT) SA shows significant structural integrity after intense damage tests and a modulation depth of 25.3%. In passively mode-locked laser operation, a pulse width of 152 fs is obtained with a repetition rate of 77.8 MHz and a signal-to-noise ratio of 75 dB. Stable operation of the femtosecond fiber laser over 200 h verifies the enhanced durability of the fSWCNT SA.