In situ high-resolution transmission electron microscopy (HRTEM) studies of the structural transformations that occur during the synthesis of carbon-coated LiFePO4 (C–LiFePO4) and heat treatment to elevated temperatures were conducted in two different electron microscopes. Both microscopes have sample holders that are capable of heating up to 1500°C, with one working under high vacuum and the other capable of operating with the sample surrounded by a low gaseous environment. The C–LiFePO4 samples were prepared using three different compositions of precursor materials with Fe(0), Fe(II) or Fe(III), a Li-containing salt and a polyethylene-block-poly(ethylene glycol)-50% ethylene oxide or lactose. The in situ TEM studies suggest that low-cost Fe(0) and a low-cost carbon-containing compound such as lactose are very attractive precursors for mass production of C–LiFePO4, and that 700°C is the optimum synthesis temperature. At temperatures higher than 800°C, LiFePO4 has a tendency to decompose. The same in situ measurements have been made on particles without carbon coat. The results show that the homogeneous deposit of the carbon deposit at 700°C is the result of the annealing that cures the disorder of the surface layer of bare LiFePO4. Electrochemical tests supported the conclusion that the C–LiFePO4 derived from Fe(0) is the most attractive for mass production.