To generate poly(ethylene terephthalate) (PET) fibers with enhanced mechanical properties, we prepared melt-spun PET fibers that incorporated pristine, acid-treated, and functionalized multi-walled carbon nanotubes (MWNTs) with 2-phenylethyl alcohol and 4-phenyl-1-butanol. The incorporation of MWNTs into the melt-spun fibers resulted in increased crystallization of PET but lower breaking stress than that of pure PET fibers, even in those containing well-dispersed functionalized MWNTs. The breaking stress of drawn composite fibers was also lower than that of pure PET fibers prepared at the same draw ratio. However, the annealing of melt-spun fibers enhanced the mechanical properties and crystallization, and the annealing effect was more dominant for composite fibers with functionalized MWNTs. These findings indicate that the presence of well-dispersed MWNTs disturbs the crystallization and orientation of PET molecules in highly stressed fibers, which differs from MWNT-induced crystallization of PET molecules in relaxed fibers. © 2012 Elsevier Ltd.