In this paper, we demonstrate that activated carbon (AC) and manganese dioxide (MnO2) coated exfoliated graphite sheets are a promising cathode for metal-air batteries. A simple and effective method is developed to exfoliate the graphite sheets and to load a catalyst onto their surfaces. Several low-cost, environmentally friendly air cathodes are fabricated, and their performances are tested by constructing Al-air b`atteries whose electrolyte 6 M NaOH, including ZnO inhibitor, is gelled by adding a cost-effective water retainer. The experimental results show that this new Al-air battery has a good discharge performance. In particular one of the new cathodes containing 50 wt% AC and 50 wt% MnO2 produces a capacity of 311 mAh/g at a constant current discharge of 1.56 mA. Finally, future research directions are discussed for the further usage of the fabricated cathodes.