A simple urea-assisted, auto-combustion synthesis was used to fabricate pure Co3O4 nanoparticles and their nanocomposite with 10 wt% reduced graphene nanosheets. Samples were annealed at 500 degrees C for 5 h under nitrogen atmosphere and their structures and morphologies were characterized by X-ray diffraction, field-emission scanning electron microscopy, field-emission transmission electron microscopy, Raman spectroscopy and BET surface area analysis. The process led to a nanocomposite containing small (25-50 nm) Co3O4 nanoparticles deposited on the graphene nanosheets. CHN analysis determined the carbon content in pure Co3O4 nanoparticles and Co3O4/CoO/graphene nanocomposite and found to be very low such as 0.091% and 2.41% respectively. In addition, to know the precise amount of CoO in the designed nanocomposite sample, phase fraction Le Bail's technique was used and found to be 20 +/- 0.5%. Using the Co3O4/CoO/graphene nanocomposite as an anode in lithium ion battery led to a higher lithium storage capacity than using pure Co3O4 nanoparticles electrode. The Co3O4/CoO/graphene nanocomposite electrode delivered an initial charge capacity of 890.44 mAh g(-1) and Exhibit 90% of good capacity retention (801.31 mAhg(-1)) after 30 cycles. While pure Co3O4 nanoparticles electrode (877.98 mAh g(-1)) fades quickly, retains only 60% (523.94 mAh g(-1)) after 30 cycles. The improved electrochemical performance of nanocomposite was attributed to higher electron and Li+ ion conductivity and the larger surface area and mechanical flexibility afforded by the graphene nanosheets. At high current densities, both electrodes showed comparable reversible capacities, demonstrating the suitability of the present synthetic technique. (C) 2013 Elsevier Ltd. All rights reserved.