A series of two-component precursor fibres for carbon fibre production has been produced by air-gap spinning of kraft lignin with cellulose as the fibreforming polymer, the latter from paper grade or dissolving grade pulps. The spun precursor fibres,containing 70% lignin and 30% cellulose, demonstrate mechanical properties equivalent to commercial textile fibres. Precursor fibres based on softwood kraft lignin were treated thermally in twosteps to carbon fibres, which had mechanical properties equal to or greater than those reported for neat lignin-based carbon fibres produced by melt spinning. An advantage of the wet-spun precursor fibres developed in this project is that they are more flexible and easier to handle with a decreased risk ofbrittle fracture. The potential for further improvement for the new type of carbon fibre is very high.