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 approximate to 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.