A graphene composite with potassium-doped FeO nanoparticles (K-FeO/graphene) is synthesized by the thermal diffusion of potassium into Fe2O3/graphene using polyol reduction. This is applied as anode material in lithium ion batteries in order to enhance the electrochemical performance of conventional iron oxides (hematite or magnetite). Rhombohedral Fe2O3 crystals are transformed into face-centered cubic FeO crystals, which show a broad d-spacing (5.2 Å) between their (111) crystal planes, by the calcination of potassium-added Fe2O3/graphene. Because of its structural characteristics, the K-FeO/graphene composite demonstrates an excellent discharge capacity of 1776 mA h g−1 at the 50th cycle at a current of 100 mA h g−1 with stable capacity retention. Even with the very high current density of 18.56 A g−1, its capacity remains at 851 mA h g−1 after 800 cycles.