  We report on the muon Knight shift measurement in single crystals of LiV2O4.
Contrary to what is anticipated for the heavy-fermion state based on the Kondo
mechanism, the presence of inhomogeneous local magnetic moments is demonstrated
by the broad distribution of the Knight shift at temperatures well below the
presumed "Kondo temperature" ($T^*\simeq 30$ K). Moreover, a significant
fraction ($\simeq10$ %) of the specimen gives rise to a second component which
is virtually non-magnetic. These observations strongly suggest that the
anomalous properties of LiV2O4 originates from frustration of local magnetic
moments.
