Abstract: In order to prepare a stable oil emulsion suitable for polyacrylonitrile (PAN) in carbon fiber production, a hydroxylamino-modified silicone oil (HA-PDMS) was synthesized by a three-step procedure and mixed with a commercial epoxy-modified silicone oil in water to prepare an oil emulsion of PAN (P-OE) in carbon fiber preparation. The structure of the intermediate products and P-OE were analyzed by FT-IR and 1H-NMR. The major properties of P-OE were investigated by a laser particle size analyzer, thermogravimetric analyzer and surface tension instrument and compared with those of the commercial one used in Japan (J-OE). The polyacrylonitrile solution in dimethyl acetamide was drawn by wet spinning and impregnated in P-OE and J-OE to obtain P-PAN and J-PAN, respectively, which were carbonized to obtain carbon fibers P-CF and J-CF. The Roder friction coefficient, hairiness and tensile strength of P-PAN, J-PAN, P-CF and J-CF were tested to compare the performance of the two kinds of oil emulsions for use in PAN-based carbon fiber production. Results show that the tensile strength of P-PAN is higher than that of J-PAN. Compared with J-CF, the tensile strength and tensile modulus of P-CF are higher and the hairiness is greatly reduced. P-OE is superior to J-OE for the use as an oil emulsion of PAN in production of PAN-based carbon fibers.