Nanostructured V2O5 is emerging as a new cathode material for lithium ion batteries for its distinctly high theoretic capacity over the current commercial cathodes. The main challenges associated with nanostructured V2O5 cathodes are structural degradation, instability of the solid-electrolyte interface layer, and poor electron conductance, which lead to low capacity and rapid decay of cyclic stability. Here, a novel composite structure of V2O5 nanoparticles encapsulated in 3D networked porous carbon matrix coated on carbon fibers (V2O5/3DC-CFs) is reported that effectively addresses the mentioned problems. Remarkably, the V2O5/3DC-CF electrode exhibits excellent overall lithium-storage performance, including high Coulombic efficiency, excellent specific capacity, outstanding cycling stability and rate property. A reversible capacity of ≈183 mA h g−1 is obtained at a high current density of 10 C, and the battery retains 185 mA h g−1 after 5000 cycles, which shows the best cycling stability reported to date among all reported cathodes of lithium ion batteries as per the knowledge. The outstanding overall properties of the V2O5/3DC-CF composite make it a promising cathode material of lithium ion batteries for the power-intensive energy storage applications.