Wide-angle X-ray diffraction (WAXD) was used to determine the structure and orientation of cellulose nanocrystals (CNC) within alginate nanocomposite fibers and provide correlations with the resulting mechanical property enhancements [Urena-Benavides et al. Langmuir 2010, 26, 14263]. The alginate junction zones were mostly composed of mannuronate/guluronate (MG) dimers; no evidence was found of an alteration of this structure upon addition of the nanofiller. The orientation of the CNC was studied from the azimuthal intensity distribution of the (2,0,0) reflection. The spread of the orientation increased with higher loads until the nanoparticles within the matrix spiraled around the longitudinal axis, which resulted in a reduction in tenacity and modulus and an increase in elongation at break and toughness. This spiral orientation is also observed in native cellulose fibers and is deterministic of their mechanical properties. Increased fiber stretching during spinning retarded the appearance of a spiral assembly and increased CNC alignment. WAXD was also used as a nondestructive method to measure nanofiller concentration. This work explains unusual mechanical properties observed in CNC-alginate nanocomposite fibers and may be applicable to other nanocomposite systems.