A porous 3D graphene hydrogel (GH) composite embedded with Si nanoparticles coated with an ultrathin SiOx layer (Si@SiOx/GH) is successfully synthesized using a solution-based self-assembly process. The thickness of the SiOx coating, formed by an ozone treatment of the 30–50 nm diameter Si particles, increases with the treatment temperature, and its formation results in the presence of Si2+ and Si4+ on the surface of the Si nanoparticles. The GH provides an electrically conducting network of interconnecting, micron-size open cells bounded by ultrathin stacked graphene sheets onto which the coated Si nanoparticles are dispersed. The agglomeration among the Si particles decreases with increasing extent of surface oxidation. Electrodes constructed with the Si@SiOx/GH containing 71 wt.% Si@SiOx exhibit a stable storage capacity of 1020 mAh g−1 at 4 A g−1 and 1640 mAh g−1 after 140 cycles at 0.1 A g−1. The outstanding electrochemical performance can be attributed to the porous, open cell 3D structure of GH, which provides a large internal space and flexible and electrically conductive graphenic matrix that can accommodate volumetric changes of Si nanoparticles and a highly porous 3D structure of high specific surface area that allows rapid diffusion of Li-ions and easy penetration of electrolyte.