Current energy crises are inspiring researchers to focus intensively on development of feasible ways to produce high performing composite electrode materials for increasing energy demands. The present work addresses this objective by developing a novel structure of NiFe2O4 (NFO) nanoparticles coated on graphene capsules (GCs) by a simple hydrothermal technique. This NFO–GCs electrode material was subjected to different types of electrochemical performance evaluations to investigate its feasibility as a supercapacitor electrode. The as-prepared NFO–GCs nanocomposite electrode exhibits high specific capacitance of 1028 F g−1 at a current density of 2 A g−1 and 94% capacitance retention at the end of 10 000 charge–discharge cycles, whereas pristine NFO electrode shows 720 F g−1 specific capacitance with 88% capacitance retention. The high specific capacitance, good rate capability, and excellent cycling stability of NFO–GCs composite can be attributed to effective synergism between the GCs and NFO. The superior electrochemical performance of NFO–GCs nanocomposite demonstrates possible application of this material as a working electrode for fully functional supercapacitor devices.