Pseudocubic α-Fe2O3/C nanocomposites with sizes of 30–35nm were synthesized via in situ carbonization of surfactants under Ar atmosphere using oleic acid-capped α-Fe2O3 nanoparticles as precursors. The transformation from oleic groups to carbon was evidenced in detail by Fourier transform infrared spectroscopy, elemental analysis and thermogravimetric analysis. The high resolution transmission electron microscope further confirmed that a thin carbon layer of 1–2nm in thickness tightly coated α-Fe2O3 nanocrystals. Compared with bare α-Fe2O3 nanoparticles, α-Fe2O3/C composites exhibited excellent cycling performance (a reversible capacity of 688mAh/g after 50 cycles at 0.2C rate) and rate capability (370mAh/g after 20 cycles at 2C) as anode materials for lithium-ion batteries. The remarkably improved electrochemical performance of α-Fe2O3/C nanocomposites was attributed to in situ carbon coating, which prevented nanoparticle aggregation, increased electronic conductivity and stabilized solid electrolyte interface (SEI) films.