Organoclay reinforced carbon fibers were prepared from: pyrolytic lignin isolated from a commercial bio-oil. Organoclay reinforcement improved, the tensile strength of the Pyrolytic lignin based carbon fibers by 12% at clay loadings below 2 wt %. Wide-angle X-ray diffraction analysis of the composite as-spun fibers revealed the successful intercalation of the organoclays (Cloisile 20A and 30B), which helped develop a more ordered structure after carbonization. However, only the 1.0 wt % Cloisite 30B as-spun fibers showed an increase in Young's modulus, while all other as-Spun fibers remained unchanged, By contrast, all of the carbon fibers showed a drop in young's modulus (by 16-38%) upon addition of organoclay, decreasing as, organoclay content increased. This is likely due to the presence of microvoids in the carbon fiber as well as the lack of preferred orientation of clay platelets along the fiber axis.