204056-Type prismatic lithium-ion battery for power tools was developed by using LiMn2O4 as cathode and CMS (carbonaceous mesophase spheres) as anode. The performance of batteries and their electrodes were characterized by SEM, ac impedance and electrochemical tests. The bulk density of cathode after pressing was selected as a main factor and it effects on high current rate capability and discharge plateau distinctly, which were investigated in details. Being charged/discharged in the voltage range of 2.5–4.2V, the normal LiMn2O4 battery with cathode bulk density of 2.7gcm−3 shows excellent electrochemical performances. The discharge capacity at 20C rate is 94.1% of that at 1C rate, and the capacity retention ratio charged at 1C and discharged at 5C is 91.7% after 100 cycles at 25°C. While modified LiMn2O4 is used as the cathode material, the cycling performance of batteries is better than that of batteries made from normal LiMn2O4. The capacity retention ratios of modified LiMn2O4 batteries after 100 cycles at 25°C and 55°C are 95.0% and 85.3%, respectively. The discharge capacity at low temperature was tested both at 1C rate and 5C rate, and the capacities discharged at −20°C were 96.3% and 94.2% of that at 1C at 25°C. Furthermore, the batteries also show good safety in the test of short circuit, overcharge, and nail penetration.