Si-based alloy materials have received great attention as an alternative anode for high capacity and safe Li-ion batteries, but practical implementation of these materials is hindered by their poor electrochemical utilization and cyclability. To tackle this problem, we developed a core-shelled FeSi2/Si@C nanocomposite by a direct ball-milling of Fe and Si powders. Such a nanostructured composite can effectively buffer the volumetric change by alloying active Si phase with inactive FeSi2 matrix in its inner cores and prevent the aggregation of the active Si particles by outer graphite shells, so as to improve the cycling stability of the composite material. As a result, the FeSi2/Si@C composite exhibits a high Li-storage capacity of ∼1010 mA g(-1) and an excellent cyclability with 94% capacity retention after 200 cycles, showing a great promise for battery applications. More significantly, the synthetic method developed in this work possesses several advantages of low cost, zero emission, and operational simplicity, possibly to be extended for making other Li-storage alloys for large-scale applications in Li-ion batteries.