In this paper, we demonstrate the preparation of reduced graphene oxide (rGO) decorated with FeF3 nanoparticles (FeF3NPs) by adding FeF3 aqueous solution to the rGO ethanol/water dispersion. The obtained FeF3/rGO nanocomposite is further tested as a cathode material for rechargeable lithium batteries and found to have high discharge capacities, good rate capabilities and cycling performance. It can deliver a high discharge capacity of 476mAhg−1 at a current density of 50mAg−1 in the voltage range 1.0–4.5V. It still delivers a discharge capacity of 146mAhg−1 with 81% capacity retention after 50 charge–discharge cycles under a current density of 1000mAg−1 in the voltage range 1.7–4.5V.