Rechargeable lithium ion batteries with aqueous electrolyte are low-cost, safe, and environmental friendly compared with organic electrolyte. Lithium iron phosphate (LiFePO4) is a potential candidate as the cathode for aqueous rechargeable lithium batteries (ARLBs), due to its excellent electrochemical window, stable structure and high theoretical capacity. However, the poor electronic conductivity and low lithium ion diffusion rate in bulk considerably restrict the electrochemical performance of LiFePO4. Herein, LiFePO4/C composites were successfully prepared by a facile sol-gel approach. Physical and electrochemical properties of the LiFePO4/C composites as cathode material in aqueous electrolyte were investigated. The LiFePO4/C composites exhibit a high reversible capacity of 163.5 mAh g−1 at 0.1C. Moreover, LiFePO4/C shows excellent rate capability and cycling capability. The improved electrochemical performance could be attributed to the positive effects of homogenous conductive carbon, which ensures the nanoscale Li-ion diffusion path and continuous electrical contact in bulk electrode.