Indium oxide nanoparticles were synthesised by using a facile and scalable strategy. The as-prepared nanoparticles (20–40 nm) were in situ and homogeneously distributed in a three-dimensional (3D) graphene architecture subsequently during the fabrication process. The obtained nanocomposite acts as a high capacity anode material for lithium-ion batteries and demonstrates good cycle stability. A drastically enhanced capacity of 750 mA h g⁻¹ in comparison with that of bare In₂O₃ nanoparticles can be maintained after 100 cycles, along with an improved high rate performance (210 mA h g⁻¹ at 1 A g⁻¹ and 120 mA h g⁻¹ at 2 A g⁻¹). The excellent performance is linked with the indium oxide nanoparticles and the unique 3D interconnected porous graphene structure. The highly conductive and porous 3D graphene structure greatly enhances the performance of lithium-ion batteries by protecting the nanoparticles from the electrolyte, stabilizing the nanoparticles during cycles and buffering the volume expansion upon lithium insertion.