By optimized mechanical alloying (MA) and subsequent firing, spinel LiMn2O4 powders for 4V lithium rechargeable batteries were prepared via direct reaction procedure, Li2O2+2Mn2O3→2LiMn2O4. The resulted spinel oxide showed a maximum discharge capacity of 125mAh/g at C/5 rate (29.6mA/g), excellent capacity retention and rate capability with electrochemical cycling compared with the sample by the conventional solid-state reaction. Detailed powder properties such as mean particle size, lattice parameter, crystallite size and lattice strain were examined, and the chemical diffusion coefficients of lithium were determined. The improved electrode performances of MA powders originated mainly from the particle size refined to submicron size, reduced crystallite size and optimum lattice parameter, which enhanced the lithium transportation kinetics. In addition, it was found that the additional doping of iron was not effective to improve the cycleability of the sample by MA process.