Silicon carbide nanofiber dispersion within a silicon oxycarbide glassy ceramic was achieved through a combination of a fast sol–gel procedure for in situ ceramic matrix synthesis and nanofiber conversion from sacrificial multiwalled carbon nanotube templates. Nanotubes were dispersed using both surfactant adsorption and a covalent sidewall modification scheme with gel-grafting capabilities. The combination of high temperature processing and silicon monoxide precursor concentrations allowed substantial carbothermal reduction of the nanotube templates, yielding silicon carbide nanofibers. The resulting nanocomposites were examined for density, Vickers microhardness, Young's modulus, and fracture toughness. The surfactant-assisted route inhibited ceramic densification, offering virtually no mechanical property enhancement. In contrast, the covalently functionalized nanotube templates at 0.8 wt% loading enhanced tensile modulus of 77% while simultaneously maintaining both Vickers microhardness and fracture toughness. These results indicate strong interfacial adhesion between the nanofiber surface and host matrix despite the abrupt chemical changes experienced during the high temperature processing.