Transition metal oxides in the nano size region are enormous attention as a new generation of anode materials for high energy density Li-ion batteries. MgFe2O4 is used for the first time as active electrode vs. lithium metal in test cells. The research has been focused on the effect of grain size of MgFe2O4 and their electrochemical performance studied. In this studies, nanostructured milled MgFe2O4 (grain size 19 nm) sample have been compared with relatively large-sized as-prepared sample (grain size 72 nm). From the result, the 19 nm grain size sample delivered an improved discharge capacity of around 850 mAh/g, whereas it is only 630 mAh/g for as-prepared sample (72 nm). These values are two times higher than that of a carbon anode (372 mAh/g). The anomalous capacity may be associated with the formation of oxygen rich MgFe2O4 samples.