The polymer-derived SiC fibers are mainly used as reinforcing materials for ceramic matrix composites (CMCs) because of their excellent mechanical properties at high temperature. However, decomposition reactions such as release of SiO and CO gases and the formation of pores proceed above 1400 °C because of impurities introduced during the curing process. In this study, polycrystalline SiC fibers were fabricated by applying iodine-curing method and using controlled pyrolysis conditions to investigate crystallization and densification behavior. Oxygen and iodine impurities in amorphous SiC fibers were reduced without pores by diffusion and release to the fiber surface depending on the pyrolysis time. In addition, the reduction of the impurity content had a positive effect on the densification and crystallization of polymer-derived SiC fibers without a sintering aid above the sintering temperature. Consequently, dense Si-Al-C-O polycrystalline fibers containing β-SiC crystal grains of 50~100 nm were easily fabricated through the blending method and controlled pyrolysis conditions.