V2ON thin film has been successfully fabricated by reactive dc sputtering method and annealing process and was investigated for its electrochemistry with lithium. The reversible discharge capacities of V2ON/Li cells cycled between 0.01 and 4.0V were found in the range of 803–915mAhg−1 during the first 50 cycles. By using ex situ scanning electron microscopy, transmission electron microscopy, selected-area electron diffraction and X-ray photoelectron spectroscopy measurements, the reversible transformation between nanocrystalline V2ON and well dispersed V, Li2O, Li3N nano-composites were revealed in the lithium electrochemical reaction. V2ON thin film exhibits high reversible capacity and good cycle performance with remarkable lower polarization than VN thin film.