An anode active material and a lithium battery employing the same are provided. In one embodiment of the anode active material, a —(CH2CH2O)— repeating unit is bonded to the surface of metal particles that contain metals that can be alloyed with lithium. The repeating unit prevents reactions between the metal particles and the electrolyte solution. Also, due to its elasticity, the repeating unit absorbs part of the volume expansion of the metal particles. The repeating unit also prevents the metal particles from condensing, thereby enhancing dispersion properties. Accordingly, the inventive anode active material has high capacity and excellent capacity retention during repeated charging and discharging, thereby providing a lithium battery with a long cycle life.