The molybdenum cluster compounds, LiYMo3O8 and Mn2Mo3O8 are prepared by the carbothermal reduction method and characterized by various techniques. The FT-IR at ambient temperature (RT), and Raman spectra at various temperatures (78–450K) are reported for the first time and results are interpreted. Magnetic studies on Mn2Mo3O8 in the temperature range, 10–350K confirm that it is ferrimagnetic, with T C =39K. Magnetic hysteresis and magnetization data at various fields and temperatures are presented. The Li-cyclability is investigated by galvanostatic cycling in the voltage range, 0.005–3.0V vs. Li at 30mA/g (0.08C). LiYMo3O8 shows a total first-discharge capacity of 305±5mAh/g whereas the first-charge capacity is only 180mAh/g at RT. However, both values increased systematically with an increase in the cycle number and yielded a reversible capacity of 385±5mAh/g at the end of 120th cycle. At 50°C, the reversible capacity is 418±5mAh/g at the 60th cycle. The coulombic efficiency ranges from 94% to 98%. The Li-cyclability behavior of Mn2Mo3O8 is entirely different from that of LiYMo3O8. The total first-discharge and charge capacities are 710±5 and 565±5mAh/g, but drastic capacity-fading occurs during cycling. The reversible capacity at the end of 50th cycle is only 205±5mAh/g. Plausible reaction mechanisms are proposed and discussed based on the galavanostatic cycling, cyclic voltammetry, ex situ XRD, ex situ TEM and impedance spectral data.