Dispersing ultrafine silicon particles within a ductile graphite matrix by means of high-energy mechanical milling (HEMM) provides an effective way to alleviate the volume effects of silicon upon the repeated electrochemical Li insertion and extraction, resulting in a significantly improved mechanical strength. However, HEMM increases the initial irreversible capacity to unaccepted levels. This deterrent can be overcome by introducing a certain amount of hexagonal Li2.6CO0.4N into above silicon-graphite hosts. The Si-graphite-Li2.6CO0.4N composite synthesized from two HEMM steps demonstrates a large reversible capacity of ca. 1 Ah g(-1) accompanied with a high cycling stability. Research reveals that the elastic graphite-Li2.6CO0.4N matrix with a good electrical/ionic conductivity can permit the silicon in the matrix to operate while maintaining the morphology integrity. More important, fully lithiated Li2.6CO0.4N plays a role in the capacity compensation in the first cycle that leads to a high initial coulombic efficiency. (C) 2004 Elsevier B.V. All rights reserved.