Very smooth surface topography of carbon fibers (CF) and its chemical inertness has been a concern while selecting them for reinforcement in polymer composites. Such fibers do not show adequate fiber-matrix adhesion and hence do not contribute to enhance the property to the extent possible. Chemical treatment or sizing of fibers using proper coupling agents appears to be the only choice to deal with this problem. In the case of friction materials (FMs), hardly anything is reported on exploring the potential of few surface treatments of CF, though CF is used as very efficient ingredient of FM. In this paper two methods (one most primitive i.e. nitric acid and second, most recent i.e. nano YbF3 particles) were selected to treat short CF and to develop FMs based on treated and untreated fibers for comparison. The studies revealed that the nano-particles treatment proved most effective and enhanced almost all the performance properties of FMs.