Technological developments in the processing of staple carbon fiber disclosed that producing hybrid yarn with improved homogeneity, uniformity, compactness and orientation can fully utilize the potential in high-performance composites. Therefore, developing hybrid yarn structures through yarn formation technology has become an emerging trend in the past few years. The present paper aims to highlight the recent development in the yarn formation technology for producing innovative yarn structures from staple carbon and thermoplastic fibers for high-performance fiber-reinforced plastics. For this purpose, pre-spinning, spinning and post-spinning operations of yarn formation technology are reviewed to technological aspects and processing of staple carbon fiber. Furthermore, recent developments in developing flyer, friction and wrap-spun hybrid yarn for high-performance composites are also presented in this paper. An attempt is carried out to develop the relationship between hybrid yarn structures and composite properties. The comparison of tensile properties of thermoplastic plastic composites shows that composite based on hybrid yarn structure possesses 300% and 700% higher tensile strength compared to nonwovens and injection molding composites.