A three-step solid state synthesis was used to produce powders of spinel phase Li4Ti5O12 with crystallite size in a few hundred nanometers range. This was followed by surface modification through the deposition of 2–10 nm Ag nanoparticles, as verified by scanning and transmission electron microscopy, X-ray diffraction, X-ray photoelectron spectroscopy, and Raman spectroscopy. The electrochemical performance of these Li4Ti5O12/n-Ag composite powders was examined by chronopotentiometry in three-electrode Swagelok cells. These measurements showed excellent high-rate performance and remarkably good cyclability of the fabricated powders. Specifically, capacity retention in excess of 86% after raising the discharge current from 1C to 10C and less than 6% of capacity loss after 50 charge/discharge cycles at 1C current rate were measured.