Crumbled graphene sheet-wrapped nano-Fe2O3 (Fe2O3@GS) composites with a three-dimension (3D) hierarchical structure have been made by a facile and efficient spray drying route with a following mild heat reduction in air. In the as-obtained composites, the crumpled GS around Fe2O3 particles could not only provide a 3D conductive matrix but also buffer the volume change of Fe2O3. Fe2O3 particles which evenly distribute in the crumpled GS could also act as spacers to avoid the close restacking of GS. Compared to the bare Fe2O3, the Fe2O3@GS composites as Li ion battery anodes show dramatically improved electrochemical performance including cyclic stability and rate capability owing to the special encapsulated structure and the excellent synergistic effect between the two components.