Conversion-type reaction anode materials with high specific capacity are attractive candidates to improve lithium ion batteries (LIBs), yet the rapid capacity fading and poor rate capability caused by drastic volume change and low electronic conductivity greatly hinder their practical applications. To circumvent these issues, the successful design of yolk@shell Fe2O3@C hybrid composed of a columnar-like Fe2O3 core within a hollow cavity completely surrounded by a thin, self-supported carbon (C) shell is presented as an anode for high-performance LIBs. This yolk@shell structure allows each Fe2O3 core to swell upon lithiation without deforming the carbon shell. This preserves the structural and electrical integrity against pulverization, as revealed by in situ transmission electron microscopy (TEM) measurement. Benefiting from these structural advantages, the resulting electrode exhibits a high reversible capacity (1013 mAh g−1 after 80 cycles at 0.2 A g−1), outstanding rate capability (710 mAh g−1 at 8 A g−1) and superior cycling stability (800 mAh g−1 after 300 cycles at 4 A g−1). A Li-ion full cell using prelithiated yolk@shell Fe2O3@C hybrid as the anode and commercial LiCoO2 (LCO) as the cathode demonstrates impressive cycling stability with a capacity retention of 84.5% after 100 cycles at 1 C rate, holding great promise for future practical applications.