Graphenothermal Reduction process is used to obtain exfoliated graphene oxide (EG)/iron (II) oxide (FeO) composite prepared at 650 °C for 5 h in argon. Structural and compositional analyses of the sample confirm the formation of EG/FeO composite. This composite shows a reversible capacity of 857 mAh g−1 at a current rate of 50 mA g−1 in the voltage range 0.005–3.0 V versus Li. An excellent capacity retention up to 60 cycles and high coulombic efficiency of 98% are also observed. Characteristic Fe2+/0 redox peaks observed in Cyclic Voltammetry measurement are explained in correlation with lithium storage mechanism. Thermal, electrical and impedance spectroscopy studies of EG/FeO composite are discussed in detail. Comparative electrochemical cycling studies of EG/FeO composite with Fe2O3 and Fe3O4 materials prepared under controlled conditions are also discussed.