Silicon is an ideal candidate anode material for Li-ion batteries (LIBs). However, it suffers from rapid capacity fading due to large volume expansion upon lithium insertion. Herein, we design and fabricate highly stable carbon coated porous Mg2Si intermetallic anode material using facile mechano-thermal technique followed by carbon coating using thermal vapour deposition (TVD), toluene as carbon source. The electrode exhibits an excellent first reversible capacity of 726 mAh g−1 at a rate of 100 mA g−1. More importantly, the electrode demonstrates high rate capability (380 mAh g−1 at high rate of 2 A g−1) as well as high cycle stability, with capacity retentions of 65% over 500 cycles. These improvements are attributable to both Mg supporting medium and the uniform carbon coating, which can effectively increase the conductivity and electronic contact of the active material and protects large volume alterations during the electrochemical cycling process.