The use of multiwall carbon nanotubes (MWNTs) as a reinforcing phase in a polyacrylonitrile (PAN) fiber matrix was investigated with the goal of producing a PAN-derived carbon/MWNT composite fiber with enhanced physical properties. MWNTs were dispersed in a PAN/DMAc (dimethylacetamide) solution and spun into composite fibers containing up to 5 wt.% MWNTs, with the use of a lab-scale dry-jet wet spinline. The spinning process resulted in alignment of the MWNTs parallel with the fiber axis. Three types of chemical vapor deposition (CVD)-derived, high-purity MWNTs were used: as produced, graphitized (heat treated to 2800 degrees C), and NaCN-treated (chemically treated to attach CN groups to the nanotube surface). Tensile tests were performed to measure yield stress/strain, initial modulus, break stress/strain, and energy to yield and energy to break. Significant mechanical property increases were recorded for the composite fibers compared with the control samples with no MWNT reinforcement: break strength +31%, initial modulus +36%, yield strength +46%, energy to yield +80%, and energy to break +83%.