Recently, battery technology has come to require a higher rate capability. The main difficulty in high-rate charge-discharge experiments is kinetic problems due to the slow diffusion of Li-ions in electrodes. Nanosizing is a popular way to achieve a higher surface area and shorter Li-ion diffusion length for fast diffusion. However, while various nanoelectrodes that provide excellent high-rate capability have been synthesized, a size-controlled synthesis and a systematic study of nanocrystalline LiCoO2 have not been carried out because of the difficulty in controlling the size. We have established the size-controlled synthesis of nanocrystalline LiCoO2 through a hydrothermal reaction and, for the first time, clarified the structural and electrochemical properties of this intercalation cathode material. Lattice expansion in nanocrystalline LiCoO2 was found from powder X-ray diffraction measurements and Raman spectroscopy. Electrochemical measurements and theoretical analyses on nanocrystalline LiCoO2 revealed that extreme size reduction below 15 nm was not favorable for most applications. An excellent high-rate capability (65% of the 1 C rate capability at 100 C) was observed in nanocrystalline LiCoO2 with an appropriate particle size of 17 nm.