The electrochemical properties of MoS2 coated MoO3 nanobelts in lithium-ion batteries were investigated. A thin layer of MoS2 was coated on the nanobelts of MoO3 successfully through a facile sulfur transfer method, and the X-ray synchrotron diffraction revealed the crystallographic features of this composite material. The specific charge of the coated sample was beyond 1100 Ah/kg (at 1C rate) and 1400 Ah/kg at C/10 rate when tested in the 0.05 V–3.5 V vs. Li+/Li range. It was found that, with coating the Coulombic efficiency was higher than 98% which indicates a highly reversible process. Additionally, the electrochemical reaction and the degradation mechanism were studied by in situ X-ray synchrotron diffraction (1st and 50th cycle), and by post mortem SEM analysis. Both revealed a structural degradation as well as a surface degradation of the electrode by means of a thick amorphous layer on the surface of the active material.