This work is devoted to the study of fundamental properties of LiFePO4 (LFP) olivine in view of the optimization of this material for its use as a positive electrode material in Li-ion batteries. The investigation of the electronic and magnetic properties appears to be successful for the detection of a small amount of impurities. By the combination of X-ray diffraction, optical spectroscopy, and magnetometry, we characterize the local structure and the morphology of LFP particles. The impact of the ferromagnetic clusters (γ-Fe2O3 or Fe2P) on the electrochemical response is examined. The electrochemical performance of the optimized LFP powders investigated at 60 °C is excellent in terms of capacity retention (153 mAh/g at 2 C) as well as cycling life. No iron dissolution was observed after 200 charge–discharge cycles at 60 °C for cells containing Li foil, Li4Ti5O12, or graphite as negative electrodes