We report a facile method of preparing vanadium nitride quantum dots on nitrogen-doped carbon matrix further applied as an active material for lithium-ion batteries. The solution-phase assisted thermal nitridation yields homogeneously dispersed vanadium nitride quantum dots with an average size of 2–3 nm. The prepared quantum dots display a high specific capacity of 602 mAh g–1, which corresponds to 89.3% of initial capacity after 250 cycles. Furthermore, the ex-situ X-ray diffraction (XRD) analysis verifies the reversible electrochemical conversion reaction of lithium nitride (Li3N). We further fabricated a full-cell, consisting of vanadium nitride quantum dots and lithium iron phosphate (LiFePO4), which displays outstanding electrochemical performance featuring a specific capacity of 147 mAh g–1 at 0.1 C and 131.3 mAh g–1 at 0.5 C with 83.8% retention after 500 cycles. The present investigation suggests that reducing the particle size to nanoscale and designing composite electrodes effectively relieves the lithiation caused mechanical pressure and confirms its potential as an active material for large-scale energy storage applications.