In this work, Lyocell fibers, used as carbon fiber precursors, were investigated. Lyocell fibers used for the carbon precursors and the carbon fibers themselves were produced in our laboratory. The mechanical properties morphology and structure of the precursors and the obtained carbon fibers were studied and compared to those of rayon. The results show that Lyocell fibers have higher tenacity and modulus, and better thermal stability than rayon fibers. Scanning electron microscopy (SEM) experiments show that Lyocell precursors have round cross-sections and fewer defects in the fibers, while rayon fiber has an oval cross-section and many defects. Wide angle X-ray diffraction (WAXD) results for the Lyocell precursors indicate that the degree of crystallinity of the Lyocell precursor is higher than that of a rayon precursor. They also show that Lyocell based carbon fibers have better mechanical properties than those that are rayon-based. WAXD data of the obtained carbon fibers show that the crystallinity of Lyocell-based carbon fiber is higher than that of rayon-based carbon fiber. It is concluded that the Lyocell fibers are better precursors for carbon fibers than rayon. (C) 2003 Wiley Periodicals, Inc.