A new carbon fiber was prepared from the lignin (steam-exploded lignin), which was isolated from steam-exploded birch wood (Betula platyphylla). The lignin was modified to melt thermally on hydrogenolysis. The chloroform soluble and carbon disulfide insoluble fraction (HL) of the reaction products was heated at 300–350°C for 30 min, giving a molten viscous material (HHL). The HHL had a softening point of 110°C and melted at over 145°C to form viscous liquid. When HHL was subjected to a spinning test, according to a conventional fusion spinning method at a speed over 100 m/min, a fine filament could be continuously formed through a pinhole (diameter: 0.3 mm). After the filaments were heated in air at 1–2°C/min up to 210°C, by which time the filament was converted to have an infusible property, the filaments were carbonized by heating from a room temperature to 1000°C at a heating rate of 5°C/min in a stream of nitrogen. The typical properties of the lignin based carbon fiber were as follows: Fiber diameter = 7.6 ± 2.7μ Elongation = 1.63 ± 0.29% Tensile strength = 660 ± 230 MPa; Modulus of elasticity = 40.7 ± 6.3 GPa. The chemical structure of the precursor was remarkably changed from that of the original lignin, indicating the elimination of aliphatic functional groups implied originally in the starting material.