A novel composite of Fe2O3 and carbon (Fe2O3@C) was synthesized hydrothermally without using any template and evaluated as anode of high energy density lithium ion battery. Physical characterizations, from XRD, FESEM, TEM, HRTEM, TGA, XPS, and Raman spectroscopy, demonstrate that the resulting Fe2O3@C takes a morphology of porous rods, which is composed of 100nm Fe2O3 particles that are coated uniformly with a layer of amorphous carbon. Charge/discharge tests indicate that the resulting Fe2O3@C delivers a reversible discharge capacity of 907mAhg−1 at 100mAg−1 and 420mAhg−1 at 5000mAg−1, and maintains a discharge capacity of 639mAhg−1 after 300 cycles at 500mAg−1. These performances can be attributed to the unique configuration of the Fe2O3@C rods. The nanoparticles in the rods shorten the path of lithium ion diffusion and increase the reaction sites for lithium insertion/extraction, the pores in the rods provide space to accommodate the volume change yielded during charge/discharge process and the carbon coating preserves the structural integrity of Fe2O3.