The synthesis and characterization of CuO/C nanocapsules for application as anode material in lithium ion batteries are reported. Introduction of onion-like carbon shell on the CuO nanoparticles leads to the improved stability, electric conductivity and electrochemical performance. When evaluated as potential anode materials for lithium-ion batteries, the novel CuO/C nanocapsules deliver an initial discharge capacity of 1043.9mAhg −1 at 100mAg −1 and maintain a high reversible capacity of 628.7mAhg −1 after 50 charge–discharge cycles, much higher than those of the CuO nanoparticles. A postmortem analysis of the CuO and CuO/C anodes subjected to prolonged cycling reveals the existence of a lower degree of surface cracking and particle breakage in the CuO/C anode than the CuO anode.