Abstract Cashew nut shell liquid (CNSL) is an abundant and renewable by-product of the cashew nut industry. It appears to be a valuable raw material for generating semiconductive polyaniline (PAni) nanomaterial with enhanced thermal stability and well-defined nanofiber morphology following a polymerization dispersion process. This study confirms that CNSL acts as a soft template during PAni synthesis, leading to an improvement in the nanofiber aspect. CNSL also improves the thermal stability of the PAni nanomaterial. Moreover, CNSL is an effective surfactant that promotes and stabilizes the dispersion of PAni nanofibers within water, allowing the more ecofriendly preparation of PAni nanomaterial by substituting the commonly used organic solvent with aqueous media. Finally, although CNSL promotes the formation of the conductive emeraldine salt form of PAni, increasing CNSL concentrations appear to plasticize the PAni polymer, leading to reduced electrical conductivity. However, this reduction is not detrimental, and PAni nanofibers remain semiconductive even under high CNSL concentrations.