Vanadium pentoxide (V2O5) with a layered structure is considered an attractive cathode material for lithium-ion batteries (LIBs) because of its low cost, abundance, and relatively high theoretical capacity (294mAhg−1 with two lithium insertion/extractions per unit formula) as compared with more commonly used cathode materials such as LiCoO2 (140mAhg−1) and LiFePO4 (170mAhg−1). However, practical applications of V2O5 are limited by its poor structural stability, low electrical conductivity, and slow electrochemical kinetics, leading to poor long-term cycling stability and rate performance. In this study, carbon-coated V2O5 nanoparticles were synthesized by facile thermal decomposition of a soluble intermediate product, namely (NH4)(VO)(C6H5O7) from a reaction of NH4VO3 with citric acid (C6H8O7); citric acid was used as both a carbon source and a chelating/reducing agent. The highly crystalline V2O5 nanoparticles were coated with a carbon layer of thickness approximately 4–5nm. The carbon-coated V2O5 nanoparticles had better electrochemical performances than those of V2O5 nanoparticles synthesized using tartaric acid (C4H6O6) or oxalic acid (C2H2O4), which are commonly used as reducing agents. They exhibited a high initial discharge capacity of 293mAhg−1 between 2.1 and 4.0V at a rate of 0.1C, and good capacity retention of 90% after 30 cycles. At high current densities of 0.5–5 C, excellent rate capabilities and cycling stabilities were achieved.