Carbon coated Fe3O4 nanocomposite (Fe3O4/C) is synthesized via a simple sol–gel route and a subsequent carbon CVD process, with Fe2O3 xerogel as intermediate product. The nanoporous Fe2O3 xerogel is reduced to Fe3O4 during the CVD process. The prepared Fe3O4/C composite presents a well-distributed nanostructure composing of Fe3O4 nanoparticles coated with carbon layer. The electrode exhibits a stable reversible capacity of over 850 mAh g−1 at 0.1 A g−1, excellent cycling performance and good rate capability. Both of the nano-scale particle size of Fe3O4 and the carbon layer contribute to the excellent electrochemical performance of Fe3O4/C. An increase in electrode capacity with cycling is observed for the prepared Fe3O4/C composite when cycled at 50 °C, which is similar to other reported transition metal oxides. The preparation process of Fe3O4/C composite is facile, mild and productive.