A novel preparation technique was developed for synthesizing carbon-coated LiFePO4 nanoparticles through a combination of spray pyrolysis (SP) with wet ball milling (WBM) followed by heat treatment. Using this technique, the preparation of carbon-coated LiFePO4 nanoparticles was investigated for a wide range of process parameters such as ball-milling time and ball-to-powder ratio. The effect of process parameters on the physical and electrochemical properties of the LiFePO4/C composite was then discussed through the results of X-ray diffraction (XRD) analysis, field-emission scanning electron microscopy (FE-SEM), transmission electron microscopy (TEM), the Brunauer–Emmet–Teller (BET) method and the use of an electrochemical cell of Li|1M LiClO4 in EC:DEC=1:1|LiFePO4. The carbon-coated LiFePO4 nanoparticles were prepared at 500°C by SP and then milled at a rotating speed of 800rpm, a ball-to-powder ratio of 40/0.5 and a ball-milling time of 3h in an Ar atmosphere followed by heat treatment at 600°C for 4h in a N2 +3% H2 atmosphere. SEM observation revealed that the particle size of LiFePO4 was significantly affected by the process parameters. Furthermore, TEM observation revealed that the LiFePO4 nanoparticles with a geometric mean diameter of 146nm were coated with a thin carbon layer of several nanometers by the present method. Electrochemical measurement demonstrated that cells containing carbon-coated LiFePO4 nanoparticles could deliver markedly improved battery performance in terms of discharge capacity, cycling stability and rate capability. The cells exhibited first discharge capacities of 165mAhg−1 at 0.1C, 130mAhg−1 at 5C, 105mAhg−1 at 20C and 75mAhg−1 at 60C with no capacity fading after 100 cycles.