High-performing Fe-based electrodes for Li-based batteries are eagerly pursued because of the abundance and environmental benignity of iron, with especially great interest in polyanionic compounds because of their flexibility in tuning the Fe(3+)/Fe(2+) redox potential. We report herein the synthesis and structure of a new Fe-based oxysulfate phase, Fe2O(SO4)2, made at low temperature from abundant elements, which electrochemically reacts with nearly 1.6 Li atoms at an average voltage of 3.0 V versus Li(+)/Li, leading to a sustained reversible capacity of ≈125 mAh/g. The Li insertion-deinsertion process, the first ever reported in any oxysulfate, entails complex phase transformations associated with the position of iron within the FeO6 octahedra. This finding opens a new path worth exploring in the quest for new positive electrode materials.