Carbonaceous nanofillers have been widely used as template additives to strengthen carbon nanofibers (CNFs), while their poor dispersion and insufficient interaction with fiber matrix often limit their optimization roles. Herein, this paper takes functionalized onion-like carbon (fOLC) as an improved nanofiller and provides a bottom-up solution to prepare fOLC-reinforced CNFs. The in-situ polymerization technique is developed to introduce fOLC in polyacrylonitrile (PAN) precursors. Meanwhile, moderate functionalization of the nanofiller is applied to further promote their dispersion and interaction with PAN. On this bases, the nanoscale spherical fOLC can achieve uniform distribution in the fiber matrix without the trouble of shape control, thus having more comprehensive impacts on fiber structures. It is shown that the added fOLC can organize the PAN molecular chains into crystalline nanofibrils in as-spun nanofibers and further promote their graphitization through nucleating and templating effects during annealing. In this case, the dispersed fOLC not only increases nucleation sites to cause grain refinement, but these rigid nanoparticles with well-developed interaction with the fiber matrix can further impede crack propagation through dispersion strengthening. As a result, the tensile strength and elongation at break of CNFs simultaneously increase by up to 65.15 % and 41.25 %, respectively.