Carbon nanotube (CNT) fibers composed of well-oriented and twisted CNT bundles are desirable as a strong and lightweight reinforcement for the high-performance composites. Herein, CNT fibers were functionalized by atmospheric pressure helium/oxygen plasma to build up the sufficient fiber/matrix interfacial bonding. The microbond test (quasi-static test) and electrical resistance measurement under cyclic loading (dynamic test) were carried out to evaluate the interfacial properties between CNT fiber and epoxy resin. The results illustrated 84.6% improvement in the interfacial shear strength (IFSS) of the functionalized CNT fiber and epoxy from 17.37 MPa to 32.08 MPa, since the generated oxygenic groups and roughed morphology on CNT fiber surface. Moreover, the linear and repeatable gauge factors (between 1.1 and 1.4) of the functionalized CNT fiber embedded in epoxy under dynamic cyclic loading demonstrated their good interfacial bonding as well. In addition, the tensile strength of the functionalized CNT fiber showed 49.5% increment. Our study for the first time reveals the interface interaction in a fiber-matrix system to provide the direct evidence for the interfacial enhancement of the plasma functionalized CNT fiber. The interface-enhanced CNT fiber can be generally applied in composites with much improved mechanical and electrical performance.