A simple ball-milling method is used to synthesize a tin oxide-silicon carbide/few-layer graphene core-shell structure in which nanometer-sized SnO2 particles are uniformly dispersed on a supporting SiC core and encapsulated with few-layer graphene coatings by in situ mechanical peeling. The SnO2-SiC/G nanocomposite material delivers a high reversible capacity of 810 mA h g−1 and 83% capacity retention over 150 charge/discharge cycles between 1.5 and 0.01 V at a rate of 0.1 A g−1. A high reversible capacity of 425 mA h g−1 also can be obtained at a rate of 2 A g−1. When discharged (Li extraction) to a higher potential at 3.0 V (vs. Li/Li+), the SnO2-SiC/G nanocomposite material delivers a reversible capacity of 1451 mA h g−1 (based on the SnO2 mass), which corresponds to 97% of the expected theoretical capacity (1494 mA h g−1, 8.4 equivalent of lithium per SnO2), and exhibits good cyclability. This result suggests that the core-shell nanostructure can achieve a completely reversible transformation from Li4.4Sn to SnO2 during discharging (i.e., Li extraction by dealloying and a reversible conversion reaction, generating 8.4 electrons). This suggests that simple mechanical milling can be a powerful approach to improve the stability of high-performance electrode materials involving structural conversion and transformation.