The use of cobalt hydroxychloride [Co2(OH)3Cl] as an anode material for lithium ion batteries (LIBs) is investigated using spherical shape and ultrafine nanocrystals directly formed by spray pyrolysis from spray solution of cobalt chloride salt. Dot-mapping images of the resulting powders reveal a uniform distribution of Co, O, and Cl throughout the powder. The Co2(OH)3Cl powder prepared directly by spray pyrolysis exhibits a high thermal stability at temperatures below 220°C, as well as having superior electrochemical properties compared with those of the CoCl2(H2O)2 and CoO powders prepared by the same process. The initial discharge capacities of the Co2(OH)3Cl and CoO powders at a constant current density of 1000 mA g−1 are found to be 1570 and 1142 mA h g−1, respectively, and their initial Coulombic efficiencies are 72 and 70%. The discharge capacities of the Co2(OH)3Cl and CoO powders after 100 cycles are 955 and 632 mA h g−1, respectively. The Co2(OH)3Cl powders have a high discharge capacity of 609 mA h g−1 even after 1000 cycles at a high current density of 5000 mA g−1.