We study the energetics of acetylene (C2H2) Molecules inside a carbon nanotube (CNT) using the ab initio pseudopotential method. The encapsulation energy of a single C2H2 molecule into the nanotube and the formation energy of (C2H2)(n)@CNT are calculated. We investigate whether a polyacetylene chain can be produced by fusion of the close-packed acetylene molecules inside the CNT and find that there is practically no activation barrier to polymerization. We propose to employ this method to obtain straight, perfectly isolated, and single-stranded polyacetylene chains encapsulated inside CNTs, which may be used for molecular electronic devices. (c) 2005 Elsevier B.V. All rights reserved.