A new lithium iron oxide, LiFeO2, with a tunnel structure was synthesized by an ion exchange reaction between the host material, beta-FeOOH, with LiOH.OH2O, and its cathodic properties for lithium cells were examined. The ion exchange reaction was carried out by solvothermal reactions using various alcohols and the new phase was obtained for the reaction at 110degreesC. Its structure, determined by X-ray diffraction measurements using Rietveld analysis, has the hollandite-type tunnel structure. Lithium cells consisting of the new LiFeO2 cathodes and lithium anodes showed good charge and discharge reversibility in the voltage range, 1.5 to 4.5 V. The lithium intercalation and deintercalation mechanism was characterized using X-ray diffraction results, Mossbauer spectroscopy, and electrochemical measurements.