LiFePO4 and LiFePO4/Fe2P composites have been produced using raw Fe2O3 materials by mechanical alloying (MA) and subsequent firing at 900°C. The LiFePO4 prepared by firing at 900°C for 30min showed a maximum discharge capacity of 160mAhg−1 at C/20, which is at a higher capacity and improved cell performance compared with the LiFePO4 prepared using for a longer firing times. LiFePO4/Fe2P composites have been synthesized by the reduction reaction of phosphate in excess of carbon. By transmission electron microscopy (TEM) and scanning electron microscopy (SEM) it was determined that the LiFePO4 phase was agglomerated with a primary particle size of 40–50nm around the surface of Fe2P with particle size of 200nm. The electronic conductivity of the LiFePO4/Fe2P composite increased in proportion with the amount that the Fe2P phase and discharge capacity increased during the cycling. The sample containing 8% of Fe2P in LiFePO4/Fe2P composite showed a high discharge capacity and rate capability at high current.