Potassium vanadate K0.25V2O5 has been successfully prepared by a facile sol–gel route and its electrochemical performance has been investigated. It is interesting that the as-prepared K0.25V2O5 exhibits the unique layer-by-layer stacked flake-like structure. Due to the novel tunneled crystal structure, the long-term cycling stability and high-rate capability of K0.25V2O5 are reported here for the first time. High specific discharge capacities of 256, 217, 180, 144, and 116 mA h g−1 can be achieved at the current densities of 50, 100, 200, 500 and 1000 mA g−1, respectively. Moreover, the K0.25V2O5 compound demonstrates excellent long-term cycling stability with a capacity fading rate of only 0.023% per cycle over 500 cycles at 500 mA g−1. The superior electrochemical performance suggests that the tunneled structure K0.25V2O5 could be a potential cathode candidate for rechargeable lithium-ion batteries.