An intermediate nematic mesophase state has been found to occur in carbonaceous pitches during their thermal transformation to coke and carbon. The molecules responsible for mesophase formation are, by and large, disc-like and mostly aromatic, and their distribution of molecular weights is quite critical. The liquid crystal exhibits uniaxial-negative optical behaviour and can be easily oriented by mechanical and magnetic forces. Mesophase pitches are usually two-phase systems in the liquid state and the mesophase becomes a nematic glass when cooled to the solid state. The two phases can be separated and their constitutions and physical behaviour determined. In certain aspects, the coexisting isotropic and anisotropic phases are remarkably similar. Because of the unique structural and rheological characteristics of the carbonaceous mesophase and its ordering and hardening behaviour, it has been possible to prepare highly oriented, high-performance products such as carbon fibres from mesophase pitch. The present state and future possibilities of the technology based on these phenomena is discussed.