By arcing a graphite rod in a pure nitrogen atmosphere, both carbon nanotubes and nitrogen-doped fullerenes have been synthesized simultaneously for the first time. Carbon nanotubes are prepared in nitrogen in much greater yield than when an inert gas is employed. Unusual structural features of the nanotubes have been observed by TEM imaging. In addition, nitrogen-doped fullerenes were characterized through laser desorption mass spectrometry and X-ray photoelectron spectroscopy.