We present a first time report on novel and easy low temperature hydrothermal method using glycine to synthesize α-Fe2O3 nanoparticles (NPs) and Vulcan carbon (VC)-supported α-Fe2O3 composite. Formation of complex between glycine and iron metal ions retards iron oxide nucleation process at early stage of reaction, resulting in uniform dispersion of the iron oxide with smaller particle size. The small α-Fe2O3 NPs are highly dispersed on the VC to form an iron oxide-carbon composite, which exhibits a high specific capacity of 1200mAhg−1 as an anode material for lithium battery, significantly improving anode performance. The excellent performance observed with the α-Fe2O3/VC composite is ascribed to well-dispersed small iron oxide particles regulated by the novel glycine-assisted approach and the presence of a carbon support. In particular, remarkably, the activity of the α-Fe2O3/VC composite is much higher than combined sum of respective values of the bare α-Fe2O3 NPs and supporting VC, indicating strong favorable synergistic interaction between α-Fe2O3 and VC in the composite. Our studies demonstrate that the carbon support plays remarkably important roles as a conductive buffer and as active sites for lithium storage in significantly improving Li ion storage capacity, cycle life and rate capability of the anode electrode.