Novel thin layer graphite encapsulated α-Fe2O3 nanoparticles were fabricated via a facile molecular self-assembly approach. This α-Fe2O3@graphite composite, used as anode in LIBs, exhibited a stable specific capacity of 518.5mAhg−1 at the current density of 1000mAg−1 with 88.2% of retention up to 1000 cycles and delivered a reversible capacity of 374mAhg−1 even at 5C rate. The high cyclic stability and superior rate performance may be addressed to the formed graphite coating layer, which can buffer the volume expansion, enhance the structural stability and increase the electrical conductivity of the Fe2O3. Moreover, the thin layer graphite coating structure can provide high specific surface area, sufficient void space to shorten the pathway of Li ions, improve the electrolyte penetration and accelerate the electrochemical Li ion storage.