Chitosan fibers (CHS) are a promising bio-based precursor for carbon materials. However, their stabilization behavior and early-stage thermal conversion are not well understood in fiber form. This study systematically investigated the thermo-oxidative stabilization of chitosan yarns using differential scanning calorimetry (DSC), thermogravimetric analysis (TGA), and Fourier-transform infrared spectroscopy (FTIR) in air and nitrogen atmospheres. Stepwise stabilization experiments revealed that major chemical transformations, including dehydration, cleavage of CO/COC linkages, and changes in C–H functionalities, were largely complete within 15 min at the investigated temperatures. Extended dwell times confirmed reaction completion and revealed minor residual endothermic processes at higher temperatures. FTIR analysis showed that stabilization primarily alters functional group chemistry while leaving the overall nitrogen content largely unaffected. Carbonization experiments conducted to evaluate carbon yield showed that stabilized fibers exhibited carbon yields comparable to or slightly lower than those obtained by direct carbonization. These results provide insight into the stabilization behavior of CHS and clarify the roles of atmosphere and dwell time during early thermal conversion. This contributes to our understanding of fiber-based chitosan precursors for developing carbon materials.