The use of gel spinning technology in the formation of polyacrylonitrile (PAN)-based carbon fibers has led to significant tensile property improvements. PAN, dimethylsulfoxide (DMSO) and dimethylformamide (DMF) solutions were dry-jet spun, gelled in methanol at −20 and −50 °C for different times from 0 to 40 d, and vacuum-dried at 0 °C for 24 h to obtain PAN fibers that were drawn to a drawing ratio (DR) of 4 in a hot glycerin bath at 110 °C, and then to various DRs in a glycerin bath at 155 °C. The effects of gelation time on the microstructures, mechanical properties and cyclization reactions of the gel-spun PAN fibers were investigated. Results showed that the gelation time affected the gel structure and the maximum possible draw ratio. The gelation effects were significant in the first 5-10 d, and were more prominent for the DMSO system than the DMF system. The maximum possible draw ratio, strength and modulus, orientation and crystallinity of the PAN fibers increased with gelation time. The cyclization temperature decreased and the reaction enthalpy increased with gelation time in cyclization, indicating an improved chain orientation and crystallinity with gelation time. Gelation was an important step affecting the microstructures and properties of gel-spun PAN fibers for making high performance carbon fibers.