Li3N-Co nanocomposite thin films fabricated by pulsed laser deposition were investigated as lithium storage electrode materials for Li-ion rechargeable batteries for the first time. A considerable capacity of 255 mAh/g could be obtained in the initial charge, indicating that nanosized metal Co could drive the decomposition of Li3N at room temperature. Ex situ high-resolution transmission electronic microscopy and selected area electronic diffraction measurements were used to investigate the components and structures of the films after charging and discharging. The ternary compound Li2.57Co0.43N was revealed to be the lithiated product. A displacement reaction of lithium with a Li3N-Co nanocomposite was proposed. Promising results about the Li3N-Co nanocomposite used as a new lithium storage material were achieved.