A nanocomposite comprised of conductive poly(3,4-ethylene dioxythiophene)PEDOT chains interleaved between the layers of crystalline V2O5 powder has been synthesized by direct in situ oxidation. The interlayer spacing of V2O5 expands from 4.32 to 13.84Å and this interlayer separation is consistent with the existence of a monolayer of PEDOT in the V2O5 framework. The nanocomposite is coupled with a large-area Li foil counter electrode and a Li wire reference electrode in 1M LiClO4 in a mixture of ethylene and dimethylcorbonate (50/50 by volume), the discharge capacity is ≥300mAhg−1 which is larger than that of pristine V2O5. The significant difference in capacity is explained on the basis of lithium ions insertion/de-insertion between the layers of V2O5.