The most significant obstacle to the widespread use of carbon-fiber-based composites by the automotive industry is the high cost of carbon fibers in comparison to other potential structural materials. Carbon fibers are currently produced by thermal pyrolysis of a polyacrylonitrile (PAN) precursor to obtain the desired properties. The most significant cost factors in the process are the high cost of precursors and the high capital equipment and energy costs in conversion to carbon fiber. The Department of Energy is supporting developmental efforts to reduce costs in both precursor production and conversion areas. This paper describes developments in the conversion process.Because of the unsuccessful results of manufacturing carbon fibers through their direct heating with microwave radiation (variable frequency microwave [VFM] and single frequency microwave [SFM] energy), new avenues were explored for this processing.Microwave-assisted plasma processing of PAN-precursor material for conversion into carbon fiber has been proven as a viable technical alternative to conventional oven processing. In comparison with current industrial grades, test results on carbon fibers processed with microwave-assisted plasma heating indicate that this technology produces fibers with high-density values (intrinsic density and bulk density) and acceptable electrical resistivity and final fiber diameters. The weight loss in the fibers ranges from 45-55%, which is equivalent to the values obtained from conventional processes. The obtained values in the mechanical strength (tensile strength and modulus) are within targets for automotive applications, although slightly lower than those for current industrial grades of carbon fiber. Based on batch processing when adjusted for actual exposure time, required processing times indicate a real economic advantage of microwave-assisted plasma processing in a continuous production mode.