Novel multifunctional composites composed of highly dispersed nanosized Fe2O3 particles, a tubular mesoporous carbon host, and a conductive polypyrrole (PPy) sealing layer are hierarchically assembled via two facile processes, including bottom-up introduction of Fe2O3 nanoparticles in tubular mesoporous carbons, followed by in situ surface sealing with the PPy coating. Fe2O3 particles are well-dispersed within the carbon matrix and PPy is spatially and selectively coated onto the external surface and the pore entrances of the Fe2O3@C composite, thereby bridging the composite particles together into a larger unit. As an anode material for Li-ion batteries (LIBs), the PPy-coated Fe2O3@C composite exhibits stable cycle performance. Additionally, the PPy-coated Fe2O3@C composite also possesses fast electrode reaction kinetics, high Fe2O3 use efficiency, and large volumetric capacity. The excellent electrochemical performance is associated with a synergistic effect of the highly porous carbon matrix and the conducting PPy sealing layer. Such multifunctional configuration prevents the aggregation of NPs and maintains the structural integrity of active materials, in addition to effectively enhancing the electronic conductivity and warranting the stability of as-formed solid electrolyte interface (SEI) films. This nanoengineering strategy might open new avenues for the design of other multifunctional composite architectures as electrode materials in order to achieve high-performance LIBs.