The progression of morphological structure and mechanical properties of PAN precursor fiber when treated under two drawing experiments on continuous stabilization stage has been characterized. Three steps are shown in the morphological rearrangements. An increase in lateral order and orientational order is observed in the initial stage, prior to the onset of significant chemical reactions in the material. Then the morphological order shows a rapid decrease with the occurrence of stabilization reactions, and following a slow change in measurements. The extent of morphological changes is found to depend on draw ratio imposed during stabilization. Experimental results indicate the presence of a less ordered phase, other than a lateral order phase in the material. The initial modulus and elongation at break go through three steps, corresponding to those of morphological order changes respectively. The tensile strength shows a continual decrease throughout the stabilization stage. Taking the two parallel experiments into comparison, it can be found that with some elongation made by stretching on stabilization, a higher level of mechanical properties is retained through the stabilization stage. The effect of stretching during stabilization on ultimate carbon fiber properties is surveyed.