Stabilization is one of the important processes used to convert polyacrylonitrile (PAN) fibers into carbon fiber and is usually driven by energy-intensive and time-consuming convective heating. A continuous and energy-efficient alternative is desirable. Here, a continuous Joule heating process has been used for the first time to stabilize PAN fibers containing carbon nanotubes (CNT). Single-component PAN/CNT fibers and bi-component fibers with core-sheath geometry were fabricated through the gel spinning method. Joule heating was conducted continuously on a 200 filament bundle for single-component fibers and on bundles with up to 6000 filaments for the bi-component fibers. A model of heat transfer and thermodynamics occurring during Joule heating is developed and utilized to understand the reductions in stabilization time and energy consumed when compared to convective heating. The minimum energy needed for stabilization through Joule heating is estimated to be less than 1percent-flag-change of the energy used through convective heating.