The long-standing issues of low intrinsic electronic conductivity, slow lithium-ion diffusion and irreversible phase transitions on deep discharge prevent the high specific capacity/energy (443 mAh g(-1) and 1,550 Wh kg(-1)) vanadium pentoxide from being used as the cathode material in practical battery applications. Here we develop a method to incorporate graphene sheets into vanadium pentoxide nanoribbons via the sol-gel process. The resulting graphene-modified nanostructured vanadium pentoxide hybrids contain only 2 wt. % graphene, yet exhibits extraordinary electrochemical performance: a specific capacity of 438 mAh g(-1), approaching the theoretical value (443 mAh g(-1)), a long cyclability and significantly enhanced rate capability. Such performance is the result of the combined effects of the graphene on structural stability, electronic conduction, vanadium redox reaction and lithium-ion diffusion supported by various experimental studies. This method provides a new avenue to create nanostructured metal oxide/graphene materials for advanced battery applications.