Graphite fibers are materials with a high specific modulus that have attracted much interest in the aerospace industry, but their high manufacturing cost and low yield are still problems that prevent their wide applications in practice. This paper presents a laser-based process for graphitization of carbon fiber (CF) and explores the effect of laser radiation on the microstructure of CF. The obtained Raman spectra indicate that the outer surface of CF evolves from turbostratic structures into a three-dimensional ordered state after being irradiated by a laser. The X-ray diffraction data revealed that the growth of crystallite was parallel to the fiber axis, and the interlayer spacing d002 decreased from 0.353 to 0.345 nm. The results of scanning electron microscopy revealed that the surface of irradiated CFs was rougher than that of the unirradiated ones and there were scale-like small fragments that had peeled off from the fibers. The tensile modulus increased by 17.51% and the Weibull average tensile strength decreased by 30.53% after being irradiated by a laser. These results demonstrate that the laser irradiation was able to increase the graphitization degree of the CFs, which showed some properties comparable to graphite fibers.