Fabrication of nanocomposite film of electrically conducting polypyrrole (PPy) and functionalized multi-walled carbon nanotubes (MWCNTs) on a stainless steel electrode by electro-deposition method and immobilization of urease onto the nanocomposite film to obtain a nanobiocomposite electrode as a sensitive electrochemical urease biosensor is reported. Cross-linking by glutaraldehyde (0.1%) method for the immobilization of urease (2 mg/mL) in a phosphate buffer solution of 0.1 molarity at a pH of 7.0 was used. The Characterization of the nanocomposite and nanobiocomposite film thus obtained was done by Scanning Electron Microscopy (SEM), Fourier Transform Infrared spectroscopy (FTIR), Cyclic Voltammetry (CV), and Electrochemical Impedance Spectroscopy (EIS). The increased size of the Cyclic voltammogram and shifting of anionic peaks towards the lower voltage indicates the incorporation of MWCNTs into the growing film during the electro-deposition of PPy on electrode. Reduction of the oxidation potential due to MWCNTs leads to lowering of potential for the electro-catalytic reduction of urea. The incorporation of functionalized MWCNT also made possible increased amount of enzyme concentration, an extended lifetime, long time stability and improved response times of the enzyme electrode. This modified nanobiocomposite electrode showed a good linear response to the urea concentration change in the range of 10 mM to 50 mM. The results obtained from Michaelis–Menten constant K´m, maximum current (Imax), detection limit, sensitivity, response time and shelf-life of electrochemical biosensor indicating good sensing for urea detection.