In this work, tin oxide nanoparticles have been synthesized by a facile and low-cost urea-assisted auto-combustion method in combination with subsequent calcination at a low temperature (350°C/5h), which produces porous structure and less nanometer size of particles (5–10nm). These nanoparticles were employed as the anode material for lithium-ion batteries, delivering better electrochemical properties of high reversible lithium storage capacity (618mAhg−1 after 40 cycles at 0.05C) and high rate capability (as high as 323mAhg−1 at 4.8C), indicating potential application for lithium-ion batteries. The microstructural change in the electrode corresponding to the change in electrochemical behavior was also studied by field-emission transmission electron microscopy, and the results supported the notion that the finer the sizes of the SnO2 nanoparticles better the cycling stability.