Graphene nanosheet (GNS)-supported Fe2O3 nanorice and nanoparticles were synthesized by a microwave-assisted hydrothermal technique. The Fe2O3-GNS rice-on-sheet composite showed a better suitability as an anode material for Li-ion batteries. It exhibited a very large reversible capacity of 1184 mAh/g at a small current of 100 mA/g as well as good cycling performances. A good rate capability was also observed for Fe2O3-GNS rice-on-sheet composite, which exhibited large capacities of 825 and 633 mAh/g at large currents of 1000 and 5000 mA/g, respectively. The outstanding electrochemical behavior was ascribed to the increased electrical conductivity and mechanical stability of Fe2O3 nanorice by GNS support and prevented aggregation of few-layer GNS by the Fe2O3 decoration during the repetitive cycling with lithium ions.