In this work microwave micro arcing (MwMA) has been utilized to engineer the surfaces of carbon fibers (CF) to enhance the interfacial bonding of resulting PEEK based composites. The CF were subjected to MwMA at different power levels ranging from 360 W to 900 W for 60 s to engineer their surfaces. The influence of MwMA on CF at various power levels was analyzed using SEM, contact angle measurement, AFM scans, and XPS study. Subsequently, MwMAed CF reinforced PEEK composite laminates were developed using compression molding. The MwMA on CF increased the surface wetting energy by 38% at 540 W microwave power level. XPS analysis suggested that MwMA at 540 W introduced oxygen containing functional group (C-O and C = O), which are likely responsible for increasing the adhesion between CF and PEEK polymer. The current study suggests that MwMA CF at 540 W showed an increment in tensile strength, flexural strength, interlaminar shear strength, and impact strength nearly by 22%, 61%, 28%, and 98% respectively. The MwMA method is novel method to improve the surface properties of carbon fibers and shows the potential use in structural applications.