LiFePO4/C, LiFe0.98Pd0.02PO4/C, and LiFe0.96Pd0.04PO4/C composite cathode materials were synthesized using the sol-gel method. The effect of palladium on the structure and electrochemical properties of LiFePO4/C have been investigated by X-ray diffraction (XRD), X-ray photoelectron spectroscopy (XPS), scanning electron microscopy (SEM), surface area measurement (BET), charge/discharge testing, and cyclic voltammetry (CV). The results indicate that palladium doping facilitates the formation of impurities, like Li3PO4. Also, the lattice parameters of the LiFePO4 structure decrease in size as the palladium content increases. In addition, the particles become larger and agglomerated by palladium incorporation. The electrochemical results show that palladium doping decreases the electrochemical performance of LiFePO4/C, owing to shrinking lattice parameters and the difficulty of achieving the diffusion of lithium ions into the structure during the intercalation/de-intercalation process. These results suggest that palladium doping by sol-gel method changes significantly the LiFePO4 structure which may impact it performances as cathode for the lithium ion battery applications.