Metal oxychlorides are proved to be new cathode materials for chloride ion batteries. However, this kind of cathode materials is still in a very early stage of research and development. The obtained reversible capacity is low and the electrochemical reaction mechanism concerning chloride ion transfer is not clear. Herein, we report FeOCl/carbon composites prepared by mechanical milling of the as-prepared FeOCl with carbon nanotube, carbon black or graphene nanoplatelets as cathode materials for chloride ion batteries. The electrochemical performance of the FeOCl electrode is evidently improved by the incorporation of graphene into the cathode. FeOCl/graphene cathode shows a high reversible capacity of 184 mAh g−1 based on the phase transformation between FeOCl and FeO. Two stages of this phase transformation are observed for the FeOCl cathode. New insight into the reaction mechanism of chloride ion dissociation of FeOCl is investigated by DFT + U + D2 calculations.