Iron oxide, with a high theoretical capacity of ~1005 mAh/g, abundance, low cost and non-toxicity, has attracted special attention for energy storage applications. However, it still suffers from a long-cycle instability owing to its abnormal volume expansion during charge/discharge process. Herein, we explore possible ways to overcome the issue using iron oxide/carbon shell composites. A simple hydrothermal process is used to encapsulate iron oxide into carbon shell with the help of a template. The carbon shell has played two beneficial roles, one being the hard shell resisting the expansion of iron oxide and the other helping improve the electron transfer ability due its high conductivity. The morphology and crystal structure are characterized by field emission scanning electron microscopy (FE-SEM) and XRD. The electrochemical performance of the as-prepared electrode material is investigated using CV and GCD measurements.