LiNi0.5Mn1.5O4 material with a spinel structure is prepared by a sol–gel method. The material is initially fired at 850°C and then subjected to a post-reaction annealing at 600°C in order to minimize the nickel deficiency. The elevated firing temperature produces materials with a small surface-area which is beneficial for good capacity retention. Indeed, the spinel LiNi0.5Mn1.5O4 not only shows a good cycle performance, but exhibits an excellent discharge capacity, i.e. 114mAhg−1 at 4.66V plateau and 127mAhg−1 in total. Cyclic voltammetry and ac impedance spectroscopy are employed to characterize the reactions of lithium insertion and extraction in the LiNi0.5Mn1.5O4 electrode. Excellent electrochemical performance and low material cost make this compound an attractive cathode for advanced lithium batteries.