We have investigated magnetite (Fe3O4) as an electroactive battery electrode material, where a linear relationship was observed between Fe3O4 crystallite size and capacity, with a negative slope. In order to better understand this novel relationship, we report here the Rietveld refinement and X-ray absorption spectroscopy (XAS) investigation of nanosized Fe3O4 as a function of crystallite size (7–26nm). Rietveld refinement established that the Fe3O4 samples were phase pure, while the extended X-ray absorption fine structure (EXAFS) and X-ray absorption near edge structure (XANES) provided insight into the local geometries and electronic structure of the iron centers, including oxidation state assignment. From our current and recent studies, we suggest that the surface of the Fe3O4 crystallites is rich in Fe3+, thus as the Fe3O4 crystallite size decreases, the electrochemical capacity increases, due to a net enrichment of Fe3O4 in Fe3+.