A Ge/GeO2 composite embedded in a carbon matrix (Ge/GeO2/C) is synthesized using a one-step mechanical ball-milling method, and its potential as a Li-ion battery anode material is evaluated. Characterization using scanning electron microscopy and transmission electron microscopy reveal that the uniformly distributed germanium and oxygen elements are embedded in the carbon matrix. In situ X-ray diffraction analysis provides insight into the complex conversion reaction as well as the Li–Ge alloy reaction. The Ge/GeO2/C composite exhibits a fairly high capacity of 915mAhg−1 up to 50 cycles (with good cycling and a high rate capability). The improvement in the electrochemical performance arises from the synergistic effects of the reduced particle size, conductive carbon matrix, and catalytic function of Ge to mitigate mechanical strain and provide an efficient network for electron transfer.