Nitrogen-doped graphene nanosheets (NGNS) are prepared by a novel mechanochemical method via all-solid-state ball-milling graphite with urea. The ball-milling process does not only successfully exfoliate the graphite into multi-layer (<10 layers) graphene nanosheets, but at the same time, enables the N element to be doped onto the graphene. Urea, acting as a new solid doping and assist-grinding agents, has the advantages of low cost and good water solubility that can simplify the fabrication process. The as-prepared NGNS are investigated in detail by XRD, SEM, HRTEM, TGA, XPS and Raman spectroscopy. The doping nitrogens are around 3.15% and dominated (>94%) by pyrindic-N and pyrrolic-N which facilitates the NGNS with enhanced electronic conductivity and Li-ion storage capability. For the first time, we demonstrate that the all-solid-state prepared NGNS exhibits, especially at high currents, enhanced cycling stability and rate capability as Lithium ion battery (LIB) anode active material when compared to pristine graphite and undoped graphene in half-cell configuration. The method presented in this article may provide a simple, clean, economical and scalable strategy for preparation of NGNS as a feasible and promising anode material for LIBs.