We explored the potential of highly stiff and thermally conductive carbon fibers for thermal management applications. The polyacrylonitrile (PAN)-based carbon fibers were graphitized up to 2300 °C through a continuous process, resulting in a tensile modulus of 427 GPa. Microstructural analysis revealed a trade-off reaction between mechanical properties during the graphitization process. This trade-off reaction in mechanical properties occurred because of the rearrangement of the crystalline structure above 2000 °C. The intrinsic properties of graphite, particularly its high in-plane energy conduction during the graphitization, led to the rearrangement and coalescence of crystalline structures in the near-surface region. Consequently, excessive grain boundaries were evident in the surface regions, causing a trade-off reaction. It was evident that the fibers graphitized at 2300 °C exhibited highly developed carbon structures in surface regions with a mixed stacking order. The measured thermal conductivity reached up to 292 W m−1 K−1, considerably higher than commercial PAN-based carbon fibers, overcoming the limitations of polymeric carbon materials. This enhanced conductivity originated from the highly developed carbon structures in the surface regions, which acted as an effective pathway for energy conduction. The resulting fibers exhibited enormous potential as thermal management materials for lightweight applications.