The conventional wet friction material, derived from mixing paper and friction material ingredients using paper making technology, has certain restraints in which it can work. When these restrictions are respected during the transmission design, the result can be an excellently performing transmission.These constraints restrict the designer in the endeavor to achieve higher performance from the same transmission size, or smaller and cost effective designs. The main restriction is the temperature stability, when more energy has to be dissipated in a smaller area. In this case, better cooling and/or a lining with higher heat resistance has to be used. Carbon fiber is considered as a friction material for its high heat / abuse resistance and a consistent coefficient of friction.This paper describes and summarizes some of the most important results obtained during the development of a carbon fiber material, with a similar cost to that of a conventional paper lining. The results include hot spot resistance, oil compatibility and heat sink capabilities. This carbon fiber friction material has opened the market to new customers.