To enhance interfacial bonding between carbon fibers and epoxy matrix, the carbon fibers have been modified with multiwall carbon nanotubes (MWCNTs) using the dip- coating technique. FT-IR spectrum of the MWCNTs shows a peak at 1640 cm−1 corresponding to the stretching mode of the C=C double bond which forms the framework of the carbon nanotube sidewall. The broad peak at 3430 cm−1 is due to O–H stretching vibration of hydroxyl groups and the peak at 1712 cm−1 corresponds to the carboxylic (C=O) group attached to the carbon fiber. The peaks at 2927 cm−1 and 2862 cm−1 are assigned to C–H stretching vibration of epoxy produced at the defect sites of acid-oxidized carbon fiber surface. SEM image shows a better interface bonding between the fiber and the matrix of modified composites (MWCNTs-CF/Ep) than those of unmodified composite. The loss factor curve of CF-MWCNTs/Ep composites is the narrowest compared with neat epoxy and CF/Ep composites which evinces that the length distribution range of molecular chain segments in the matrix is the narrowest. From the dependence of the AC conductivity on temperature, we can see that σAC increases when temperature increases. The increase in electrical conductivity of the composites may be a result of the increased chain ordering due to annealing effect. The use of MWCNTs to modify the surface of carbon fiber resulted in a large amount of junctions among MWCNT causing an increase in the electrical and thermal conductivity by forming conducting paths in the matrix. The MWCNTs-CF/Ep composite shows better thermal stability than unmodified composites. The strong interaction between CF and MWCNTs can retard diffusion of small molecules from the resin matrix at high temperature and hence, result in the improved thermal stability of the modified CF/Ep composite.