The microstmcture and conductive mechanism of high density polyethylene/carbon black (HDPE/CB) composite were investigated by positron annihilation lifetime spectroscopy (PALS). The PALS were measured in two series of samples,one with various CB contents in the composites and the other with various γ-irradiation doses in HDPE/CB composite containing 20 wt% CB. It was found that CB particles distribute in the amorphous regions, the CB critical content value in HDPE/CB composite is about 16.7 wt% and the suitable γ-irradiation dose for improving the conductive behavior of HDPE/CB composite is about 20 Mrad. The result observed for the second set of samples suggests that γ-irradiation causes not only cross-linking in amorphous regions but also destruction of the partial crystalline structure. Therefore, a suitable irradiation dose, about 20 Mrad, can induce sufficient cross-linking in the amorphous regions without enhancing the decomposition of crystalline structure, so that the positive temperature coefficient (PTC) effect remains while the negative temperature coefficient (NTC) effect is suppressed. A new interpretation of the conductive mechanism, which might provide a more detailed explanation of the PTC effect and the NTC effect has been proposed.