Uniformly distributed carbon-coated Sn92Co8 nanoalloys with a particle size of 50 and 10 nm were prepared using a butyllithium and naphthalide solution at 500 and 700°C, respectively. The samples annealed at 500°C were covered with an amorphous carbon layer with a thickness of about 40 nm, but its thickness was shrunk to 8 nm when annealed at 700°C. The first charge capacity increased with increasing annealing temperature and exhibited 380 and 662 mAh/g at 600 and 700°C, respectively. This is due to enhanced ordering of the carbon layer structure and full decomposition of the butyl ligands that limited Li-ion intercalation/ deintercalation. The capacity retention of the nanoalloys annealed at 500 and 700°C was 76 and 54% after 30 cycles at a rate of 0.3 C =210 mA/g, while that of bulk Sn92Co8 alloy was 15%. Much improved capacity retention of the carbon-coated nanoalloys is associated with the thicker carbon layer on the particle surface that acts as a more effective buffer layer for volume expansion during lithium alloying/dealloying than that of the bulk alloy.