Ultrathin hydrated vanadium pentoxide (V2O5·nH2O) nanosheets are fabricated via a water based exfoliation technique. The exfoliation process involves reflux of the precursor, 1:4 mixture of VO2 and V2O5, in water at 80°C for 24h. Operando and ex situ X-ray diffraction (XRD) studies are conducted to follow the structural changes during the exfoliation process. The chemical and thermal analyses suggest that the molecular formula of the nanosheet is H 0.2 V 1.8 V V 0.2 IV O 5 ⋅ 0.5 H 2 O . The V2O5·nH2O nanosheets are mixed with 10% of multi-walled carbon nanotube (MW-CNT) to form a composite material assigned as (VOx-CNT). Free standing electrodes (FSE) and conventionally casted electrodes (CCE) of VOx-CNT are fabricated and then tested as a positive electrode material for lithium batteries. The FSE shows reversible capacities of 300 and 97 mAhg-1 at current densities of 10 and 200 mAhg-1, respectively. This is better than earlier reports for free-standing electrodes. The CCE delivers discharge capacities of 175 and 93 mAhg-1 at current densities of 10 and 200 mAhg-1, respectively.