An environmental, economic and highly effective method for carbon fiber hydroxylated-functionalization based on Fenton's reagent treatment is used to improve the electrochemical activity of graphite felt (GF) as the positive electrode in all vanadium redox flow battery (VRFB). The effect of H2O2 content in Fenton's reagent on the structure and electrochemical properties of GF is investigated. The scanning electron microscope (SEM) indicates that the surface of the treated GF is etched increasingly with the content of H2O2. The Fourier transformation infrared (FTIR) spectroscopy shows that the peak intensity of hydroxyl groups on the treated felt is increased with the H2O2 concentration, which is further verified by X-ray photoelectron spectroscopy (XPS). Cyclic voltammetry (CV) and electrochemical impedance spectroscopy (EIS) show that the treated sample exhibits a higher electrochemical activity. A VRFB with the treated GF as electrodes exhibits higher coulombic, voltage and energy efficiency (98.8%, 75.1% and 74.2%) than that with the untreated GF (93.9%, 72.1% and 67.7%) at 60mAcm−2, and this method is even superior when compared with the reported methods.