Abstract Carbon nanotube (CNT) can exhibit electrical conductivity and introduce electric current into polymer. Using dry-jet-wet spin technology, polyacrylonitrile (PAN)/CNT composite fibers with 15 wt% and 20 wt% of CNT content were fabricated. The electrical conductivity of PAN/CNT fibers was enhanced by the annealing process at different temperatures and changed with time. These fibers could also respond to stretching, and the electrical conductivity decreased by 50% when the elongation reached 3%. In addition, electrical current can induce Joule heating effect and thermally transform PAN/CNT composite fibers. With the application of various electrical currents up to 7 mA at a fixed length, conductivity was enhanced from around 25 S/m to higher than 800 S/m, and composite fibers were stabilized in air. The temperature of composite fibers can increase from room temperature to several hundreds of degree Celsius measured by an infra-red (IR) microscope. Joule heating effect can also be estimated according to one-dimensional steady-state heat transfer equation, which reveals the temperature can be high enough to stabilize or carbonize fibers. As a result, this research provides a new idea of heating fabrics for thermal regulation, and a new approach for stabilizing and carbonizing PAN-based carbon fibers.