The effect of KI encapsulation in narrow ( HiPCO) single-walled carbon nanotubes is studied via Raman spectroscopy and optical absorption. The analysis of the data explores the interplay between strain and structural modifications, bond-length changes, charge transfer, and electronic density of states. KI encapsulation appears to be consistent with both charge transfer and strain that shrink both the C-C bonds and the overall nanotube along the axial direction. The charge transfer in larger semiconducting nanotubes is low and comparable with some cases of electrochemical doping, while optical transitions between pairs of singularities of the density of states are quenched for narrow metallic nanotubes. Stronger changes in the density of states occur in some energy ranges and are attributed to polarization van der Waals interactions caused by the ionic encapsulate. Unlike doping with other species, such as atoms and small molecules, encapsulation of inorganic compounds via the molten-phase route provides stable effects due to maximal occupation of the nanotube inner space.