The solubility of a NiO cathode in molten carbonate fuel cell (MCFC) electrolyte is one of the major technical obstacles to the commercialization of such a fuel cell. LiFeO2 has been selected as a candidate cathode material for MCFC because its solubility is very small and the rate of dissolution into the melt is slower than that for NiO. However, the electrical conductivity of pure LiFeO2 is lower than that of NiO. Thus a novel cathode for MCFC was prepared by coating nanometer LiFeO2 grains on the surface of a porous NiO cathode using a simple combustion process. X-ray diffraction (XRD), energy dispersive X-ray analysis (EDAX) and scanning electron microscopy (SEM) were employed in the cathode characterization. As can be detected by XRD and EDAX, the LiFeO2 coating on the surfaces of the modified NiO cathodes increased with increase in the pre-treatment times. SEM observation shows that the coating consisted of nanometer LiFeO2 grains that were tightly sintered with the NiO particles. Due to its excellent stability in carbonate melts under the standard conditions of an MCFC cathode, the LiFCO2 coating significantly retarded the dissolution of the inner NiO in either eutectic Li-K or Li-Na carbonate melts. The measurements of the electrical conductivity show that, although the pure LiFeO2 has a much lower electrical conductivity in comparison with the NiO(Li), the electrical conductivity of LiFeO2 coated NiO was similar to that of NiO(Li) after being immersed and lithiated in Li-K carbonates. In this work, the tests of the unit cells show that the LiFeO2 coated NiO cathode had a better performance than the NiO cathode.