Compared with most cathodes for lithium-ion batteries (LIBs), α-MoO3 exhibits high specific capacity and therefore receives widespread attention. However, due to its irreversible structural transformation, the capacity of α-MoO3 declines rapidly upon discharge-charge process. Herein, via H2 plasma etching, oxygen-deficient α-MoO3-x with improved electrochemical performance is prepared on the basis of pristine α-MoO3 (MoO3 (I)). The obtained MoO3 (II) (10 min etching) and MoO3 (III) (20 min etching) have reduced bandgap and expanded van der Waals gap (vdW gap). Electrochemical test results demonstrate MoO3(II) obtains the largest Li+ diffusion coefficient, the lowest charge transfer resistance and the slightest polarization. In situ X-ray diffraction characterization further reveals that during cycling, vdW gap of MoO3 (II) changes periodically within a small range, indicating a stabilized crystal structure. This work shows that moderate oxygen vacancies can enhance the capacity and stabilize the structure of molybdenum trioxide cathode for LIBs, which has great potential in other cathode materials.