As the promising anode material for Li-ion batteries (LIBs), transition metal oxides possess much higher theoretical lithium storage capacities than the commercially used graphite. However, the large volume variation during the lithium insertion/desertion processes and the relatively low electrical conductivity of transition metal oxides usually lead to poor battery performance, impeding their extensive use for LIBs. Here, we report the synthesis of a new type of nanocomposite consisting of Fe3O4 nanocrystals (NCs) and multiwalled carbon nanotubes (CNTs), which can be used as high-performance LIB anode materials. The nanocomposite is formed by hydrolysis of iron precursors in the presence of poly(acrylic acid)-functionalized CNTs (PAA-CNTs), resulting into Fe3O4 NCs which are firmly and uniformly attached to the CNT surface. When the as-formed nanocomposite is coated with a carbon layer by pyrolysis of the low-cost petroleum pitch, the nanocomposite electrodes exhibit significantly enhanced lithium storage capacities and cyclability. In particular, a reversible lithium storage capacity of 850 mAh g−1 is retained after 100 charge/discharge cycles at a current rate of 0.1C. In comparison, considerably poor battery performance is observed when the CNT- or carbon-free counterpart is used as the LIB anode.