The microstructure of a series of mesophase pitch-based carbon fibres have been examined using X-ray diffraction, electron microscopy and Raman spectroscopy. It has been shown that the mechanical properties of the fibres are related directly to the response of this microstructure to deformation and, in particular, that the Young's modulus and tensile strength of the fibres are controlled directly by the fibre microstructure. It has also been shown that Raman spectroscopy can be a useful technique for not only characterizing the microstructure of the fibres but also for following molecular deformation in the fibres. It was found that the position of the 1580 cm⁻¹ Raman band for the fibres shifted with the application of stress and that the rate of shift per unit strain was proportional to the Young's modulus of the fibres. It was also shown that this reflected the higher degree of stressing of the graphite plane in the higher modulus fibres, consistent with recently developed theories which attempt to explain the dependence of the mechanical properties of carbon fibres upon the degree of orientation of the graphite planes.