The origin of highly efficient iodine doping of carbon nanotubes is not well understood. Relying on first-principles calculations, we found that iodine molecules (I2) in contact with a carbon nanotube interact to form monoiodide or/and polyiodide from two and three I2 as a result of removing electrons from the carbon nanotube (p-type doping). Charge per iodine atom for monoiodide ion or iodine atom at end of iodine chain is significantly higher than that for I2. This atomic analysis extends previous studies showing that polyiodide ions are the dominant dopants. Moreover, we observed isolated I atoms in atomically resolved transmission electron microscopy, which proves the production of monoiodide. Finally, using Raman spectroscopy, we quantitatively determined the doping level and estimated the number of conducting channels in high electrical conductivity fibers composed of iodine-doped double-wall carbon nanotubes.