The local structure and oxidation states for both the precursors and the LiFePO4/C composite powders were investigated by X-ray absorption spectroscopy (XAS) to provide a deep insight into their formation mechanism. It was found that the local structure and oxidation states of the precursors and the synthesized LiFePO4/C powders as well as the electrochemical properties of the synthesized powders were strongly influenced by the R ratio (R: molar ratio of citric acid to total metal ions). The oxidation states of iron ions of the precursors for R =1 and 0.75 consist mainly of Fe(II) and traces of Fe(III). However, the oxidation state of iron ions of the precursor for R =0.5 comprises mainly of Fe(III). The oxidation state of iron ions of all the synthesized powders is Fe(II). The structure of the precursors and the synthesized powders for R =1 and 0.75 is more ordering than that for R =0.5. It is in good agreement with the observation of the cation mixing obtained from the Riteveld analysis of the XRD data. The better the electrochemical performance is, the more ordering the structure or the less the cation mixing. However, the effect of the R values on the carbon content is also essential for the electrochemical properties of the synthesized LiFePO4/C composite powders. Increasing the carbon content leads to the increase in the electronic conductivity but impedes the Li+ ion diffusion of the composite materials. Consequently, the powders synthesized at the optimal R ratio of 0.75 exhibited the highest initial capacity, about 150mAhg−1 when cycled at 1/40C rate at room temperature. The structural scheme of the precursors and the synthesized powders and the formation mechanism of the LiFePO4/C composite powders are also addressed in this work.