Fe2O3 has been considered as a promising anode material for lithium-ion batteries (LIBs) owing to its high specific capacity. However, its sluggish charge transfer resulting from the poor electrical conductivity severely limits the electrochemical performance. In this work, an ultrathin Fe3O4 layer-coated Fe2O3 composite was fabricated through a facile one-step hydrothermal method with hydrazine hydrate as the reductant in an alkaline environment. Upon use as the anode for LIBS, the as-resulted Fe2O3@Fe3O4 composite achieves a high specific capacity of 1539.5 mA h g−1 at a current density of 100 mA g−1 and simultaneously maintains a high discharge capacity of 707.8 mAh g−1 after 800 cycles at 1000 mA g−1, outperforming the commercial Fe2O3 sample. Electrochemical characterizations reveal that the improved electrochemical performance can be attributed to the combined effects of higher theoretical specific capacity of Fe2O3 and superior electrical conductivity of Fe3O4.