Iron hydroxyl phosphate hydrate Fe1.19(PO4)(OH)0.57(H2O)0.43 (FPHH) was obtained by hydrothermal synthesis at 220°C for 6hours. Addition of carbon black to the solution before hydrothermal treatment led to a reduction of the FPHH particle size from ∼10μm in the carbon-free compound to ∼300–500nm in the FPHH-10%C and FPHH-20%C composite with a good dispersion of conducting carbon black. X-ray diffraction, 57Fe Mossbauer spectroscopy and a thermal decomposition study showed that the addition of carbon black did not interfere with the formation of the FPHH phase. Thanks to its favorable microstructural characteristics, the FPHH-10%C and FPHH-20%C material exhibited good performance as positive electrode for Li-ion battery, with high initial discharge capacities of 150, 128 and 112mAhg−1 at 0.25C, 0.5C and 1C rates respectively and 99% capacity retention after 150 cycles at 2C. These results show that addition of solid carbon directly into the solution prior to hydrothermal treatment is a simple and effective way to reduce particle size and also to improve electronic conductivity by dispersing conductive carbon around the active material. This approach is easily transferable to other compounds prepared by hydrothermal synthesis, in order to control particle size while retaining the advantage of crystallization at low temperature.