This paper explores the manufacturing of pure polyacrylonitrile (PAN) fibers and magnetic PAN/Fe₃O₄ nanocomposite fibers by an electrospinning process. A uniform, bead-free fiber production process is developed by optimizing electrospinning conditions: polymer concentration, applied electric voltage, feedrate, and distance between needle tip to collector. The experiments demonstrate that slight changes in operating parameters may result in significant variations in the fiber morphology. The fiber formation mechanism for both pure PAN and the Fe₃O₄ nanoparticles suspended in PAN solutions is explained from the rheologial behavior of the solution. The nanocomposite fibers were characterized by scanning electron microscopy (SEM), Fourier transform infrared (FT-IR) spectrophotometer, and X-ray diffraction (XRD). FT-IR and XRD results indicate that the introduction of Fe₃O₄ nanoparticles into the polymer matrix has a significant effect on the crystallinity of PAN and a strong interaction between PAN and Fe₃O₄ nanoparticles. The magnetic properties of the nanoparticles in the polymer nanocomposite fibers are different from the as received nanoparticles.