The surface of graphene is modified by nickel nanoparticles which are in-situ reduced from NiO nanoparticles by graphene. The nickel nanoparticles obtained are up to 10nm in size and are strongly anchored on the surface of graphene sheets. As an anode material for lithium ion batteries, the graphene–Ni hybrid material delivers a reversible capacity of 675mAhg−1 after 35 discharge/charge cycles at a current density of 100mAg−1, corresponding to 85% retention of the initial charge capacity. In addition, the graphene–Ni hybrid electrode exhibits much better rate capability compared to its pure counterpart operated at various rates between 200 and 800mAg−1. Such enhanced lithium storage performance of the graphene–Ni hybrid electrode can be ascribed to the enhanced electronic transport and Li+ migration through the solid electrolyte interphase (SEI) film as a consequence of that the anchored nickel nanoparticles increase the electronic conductivity and modify the structure of SEI film covering the surface of graphene.