We extend the time-dependent density functional formalism to study the microscopic response of defective nanotubes to electronic excitations. We find the lifetime of electronic excitations in these nanostructures to be several orders of magnitude longer than in solids, necessitating the use of excited-state molecular dynamics to correctly describe the atomic motion. We find that electronically excited nanotubes with monatomic vacancies show an unexpected self-healing ability, which is intimately linked to their nanometer size. (C) 2004 Elsevier B.V. All rights reserved.