A commercial textile-grade acrylic fiber was modified with guanidine hydrochloride for the preparation of low-cost carbon fibers. Thermal behavior of the modified acrylic fiber was studied by simultaneous differential scanning calorimetry and thermogravimetric analysis, and the effect of guanidine hydrochloride on the thermal stabilization of acrylic fiber was investigated by Fourier transform infrared spectrometry and densimetry. The results indicated that guanidine hydrochloride could initiate the cyclization reaction of nitrile groups at lower temperature and promote the thermal stabilization of acrylic fiber. Compared with the carbon fibers prepared from the original acrylic fiber, the tensile strength and tensile modulus of the carbon fibers prepared from the modified acrylic fiber had been increased by about 72% and 34%, respectively. The guanidine hydrochloride-modified acrylic fiber was expected to be a practical low-cost carbon fiber precursor.