This Small Business Innovation Research (SBIR) Phase I project aims to develop high tensile strength and low density polyacrylonitrile (PAN)/carbon nanotube (CNT) based carbon fibers. The approach is to use a newly-developed gel spun technology. Process conditions will be optimized to obtain a tensile strength greater than 7 GPa, a tensile modulus greater than 450 GPa, and a density less than 1.2 g/cm3. Current PAN-based commercial carbon fibers typically exhibit a tensile strength of 5 GPa, a tensile modulus of 300 GPa and a density of 1.8 g/cm3. The broader/commercial impact of this project will be the potential to produce carbon fibers with significantly higher specific tensile strength and lower density than the current PAN-based commercial carbon fibers. The carbon fibers are currently used in high-performance composites for satellite, airplane fuselage, airplane wing and trust structures, high-performance automobile applications, etc, where energy efficiency is very important. This project will lead to nano-engineered carbon fibers and reduce the weight of composite materials, thus resulting in significant savings in energy consumption