An effective method to increase the mechanical properties of poly (vinyl alcohol) (PVA) and multi-walled carbon nanotubes (MWCNTs) composite fibers is reported. MWCNTs in the composite fibers were functionalized with PVA through a one-step grafting process by the nondestructive Friedel–Crafts alkylation in an aluminum chloride medium. Under suitable conditions, the resulting functionalized MWCNTs (f-MWCNTs) of the selected content of 0.05 wt% based on the PVA weight were added to a DMSO/H2O (vol ratio = 3/1) mixed solvent, and the f-MWCNTs were highly dispersed in the solution, which remained uniform even after 30 days. The solution was gel spun and the as-spun fibers were hot-drawn to prepare the final PVA/f-MWCNTs composite fibers. The tensile strength and modulus of the fibers were found to be about 926 MPa and 59 GPa, which increased by 280.6% and 421.0% relative to pure PVA fibers, respectively.