A novel approach for bulk synthesis of lithium-intercalated graphene sheets through the reduction of exfoliated graphene oxide in liquid ammonia and lithium metal is reported. It is demonstrated here that as-synthesized lithiated graphite oxide sheets (Li-RGO) can be directly used as an electrode material in lithium batteries. The electrochemical studies on Li-RGO electrodes show a significant enhancement in the specific capacity of the lithium battery over commercially available graphite electrodes. Partial intercalation of lithium ions in between graphene layers makes this material a good candidate for electrochemical energy storage applications.