NiO–Ni nanocomposite was prepared by calcining a mixture of Ni2(OH)2CO3 and ethanol in a tube furnace at 700°C for 45min in air. The microstructure and morphology of the powders were characterized by means of X-ray diffraction (XRD) and transmission electron microscopy (TEM). In the composite, nanoscale Ni particles (<10nm) were dispersed in the NiO matrix (about 100nm). Electrochemical tests showed that the nanocomposite had higher initial and reversible capacity than pure NiO. The presence of the nanoscale Ni phase had improved both of the initial coulombic efficiency and the cycling performance, due to its catalytic activity, which would facilitate the decomposition of Li2O and the SEI during the charge process.