Carbon fibers (CFs) have long been of great interest as a crucial material for the aerospace industry. Their practical application requires higher performance and efficient fabrication. This study presents an in situ electrothermal approach for graphitizing CFs. During the electrothermal process, an electric field manipulates the growth of graphite microcrystalline structures, yielding single, regular, large graphite microcrystals, thereby inducing their alignment. The in situ electrothermal approach increased the strength of the resulting CFs by 50.3% and enhanced their Young’s moduli by 9.2% compared with conventional approaches. Moreover, the use of a molecular dynamics (MD)–Reaxff force field and density functional theory calculations in conjunction with the characterization tools revealed the positive effect of the electric field on microcrystalline growth, which explains the peculiar microstructures and enhanced mechanical properties of CFs prepared using the electrothermal approach. Accordingly, this approach is expected to be a better alternative to the current graphitization and carbonization process in the future.