A novel graphene-nanosheet-wrapped LiV3O8 nanoflakes (GNS/LiV3O8) nanocomposite has been generated by sheet-to-sheet self-assembly of ultrathin LiV3O8 nanoflakes and graphene nanosheets. When used as a cathode material for lithium-ion batteries, the GNS/LiV3O8 nanocomposites show superior rate capability and excellent cycling stability. Discharge capacities of approximately 328.7, 305.3, 276.9, 251.4, and 209.3 mAh g−1 are achieved at current densities of 2, 5, 10, 20, and 50C, respectively. A reversible capacity of approximately 287.2 mAh g−1 is retained even after 100 cycles at 1.0 A g−1 (about 3C), approximately 88.3% of the initial discharge capacity. It is believed that the unique nanoflake morphology of LiV3O8 and the surface modification by graphene nanosheets contribute to the improved kinetics of lithium-ion diffusion, excellent structural stability and superior electrochemical performance. The structural evolution of LiV3O8 species upon charging and discharging is investigated by in situ X-ray diffraction technique. Anisotropic lattice expansion is found occurring along a, b and c axes upon the insertion of lithium ions into the crystal structure of LiV3O8.