Nanocrystalline lithium ferrite LiFe5O8 powders were synthesized by the sol gel auto-combustion method from the corresponding metal nitrates using urea as a fuel. DTA results showed that the LiFe5O8 phase started to form at temperature around 385 °C. X-ray diffraction analysis indicates that all compositions were formed in a single-phase cubic spinel structure at different annealing temperatures from 400 to 800 °C for 2 h. The lattice parameter was found to decrease whereas the particle size was increased with annealing temperature. The frequency exponent “s” of lithium ferrite lies in the range 0.5≤s≤1, which confirmed the electron hopping between Fe2+ and Fe3+ ions. The electron mobility in LiFe5O8 samples ranged from 0.05 to 0.29 eV, which clearly indicated that the present lithium ferrites have semiconductor-like behavior. The saturation magnetization was increased on increasing the annealing temperature up to 800 °C. High saturation magnetization (Ms=51.9 emu/g) was achieved for the ferrite powders produced at annealing temperature 800 °C for 2 h.