The capability of Li-decorated (AlN)(n) (n = 12, 24, 36) nanocages for hydrogen storage has been studied by using density functional theory (DFT) with the generalized gradient approximation (GGA). It is found that each Al atom is capable of binding one H-2 molecule up to a gravimetric density of hydrogen storage of 4.7 wt% with an average binding energy of 0.189, 0.154, and 0.144 eV/H-2 in the pristine (AlN)(n) (n = 12, 24, 36) nanocages, respectively. Further, we find that Li atoms can be preferentially decorated on the top of N atoms in (AlN)(n) (n = 12, 24, 36) nanocages without clustering, and up to two H-2 molecules can bind to each Li atom with an average binding energy of 0.145, 0.154, 0.102 eV/H-2 in the Li-n(AlN)(n) (n = 12, 24, 36) nanocages, respectively. Both the polarization of the H-2 molecules and the hybridization of the Li-2p orbitals with the H-s orbitals contribute to the H-2 adsorption on the Li atoms. Thus, the Li-decorated (AlN)(n) (n = 12, 24, 36) nanocages can store hydrogen up to 7.7 wt%, approaching the U.S. Department of Energy (DOE) target of 9 wt% by the year 2015, and the average binding energies of H-2 molecules lying in the range of 0.1-0.2 eV/H-2 are favorable for the reversible hydrogen adsorption/desorption at ambient conditions. It is also pointed out that when allowed to interact with each other, the agglomeration of Li-decorated (AlN)(n) nanocages would lower the hydrogen storage capacity. Copyright (C) 2013, Hydrogen Energy Publications, LLC. Published by Elsevier Ltd. All rights reserved.