Pure, nano-sized LiFePO4 and carbon-coated LiFePO4 (LiFePO4/C) positive electrode (cathode) materials are synthesized by a mechanical activation process that consists of high-energy ball milling and firing steps. The influence of the processing parameters such as firing temperature, firing time and ball-milling time on the structure, particle size, morphology and electrochemical performance of the active material is investigated. An increase in firing temperature causes a pronounced growth in particle size, especially above 600°C. A firing time longer than 10h at 600°C results in particle agglomeration; whereas, a ball milling time longer than 15h does not further reduce the particle size. The electrochemical properties also vary considerably depending on these parameters and the highest initial discharge capacity is obtained with a LiFePO4/C sample prepared by ball milling for 15h and firing for 10h at 600°C. Comparison of the cyclic voltammograms of LiFePO4 and LiFePO4/C shows enhanced reaction kinetics and reversibility for the carbon-coated sample. Good cycle performance is exhibited by LiFePO4/C in lithium batteries cycled at room temperature. At the high current density of 2C, an initial discharge capacity of 125mAhg−1 (73.5% of theoretical capacity) is obtained with a low capacity fading of 0.18% per cycle over 55 cycles.