Cationic substitutions in lithium ferrite spinel (LiFe5O8) leading to modifications in magnetic properties have a significant role in their technological applications. In this context, LiFe5−xCrxO8, compounds with 0 ≤ x ≤ 3 were synthesized and studied using X-ray diffraction, X-ray photoelectron spectroscopy (XPS), Mo¨ssbauer spectroscopy and magnetization measurements. Oxidation states of Fe and Cr are found to be 3 + from XPS investigations and further confirmed from the Mo¨ssbauer analysis. Cr replaces Fe from both tetrahedral and octahedral sites. Magnetization and magnetic ordering temperature decrease with increasing Cr concentration. This is consequent to reduced strength of dominant Fe - O - Fe interactions due to replacement of Fe with Cr cation possessing relatively smaller magnetic moment. The positive value of Curie-Weiss constant implies that the system has dominant ferromagnetic interactions. The much important negative magnetization and spin compensation phenomena are observed only in specific range of doping concentration (x = 2.5–3). Spin compensation in LiFe2.5Cr2.5O8 occurs at 315 K, close to room temperature.