The lithium storage mechanism in molybdenum disulfide (MoS2) has been comprehensively investigated as the existing conversion-based storage mechanism is unable to explain the reason behind its high practical capacity, high polarization losses, and the change in the discharge profile after the 1st charge-discharge cycle. To resolve these issues and to gain a deeper understanding of MoS2-based Li-ion batteries, for the first time, we have studied the reaction mechanism of the MoS2 anode using various experimental techniques such as XRD, Raman spectroscopy, electrochemical impedance spectroscopy, XANES, and EXAFS, as well as ab initio density functional theory based calculations. On the basis of the results presented here, and in line with some experimental findings, we find that the reaction of MoS2 with Li is not as simple as with usual metal oxide based conversion reactions, but that the pathway of the conversion reaction changes after the first discharge process. In the first discharge process, lithiation is initiated by a limited intercalation process, followed by a conversion reaction that produces molybdenum nanoparticles (Mo) and lithium sulfide (Li 2S). Whereas, unlike oxide-based conversion materials, MoS 2 does not transverse back during the delithiation process. Indeed, instead of MoS2 formation, we identified the presence of polysulfur after the complete cycle. In consecutive cycles, polysulfur reacts with lithium and forms Li2S/Li2S2, and this Li-S reaction is found to be highly reversible in nature and the only source of the high practical capacity observed in this electrode. To validate our experimental findings, an atomic scale ab initio computational study was also carried out, which likewise suggests that Li first intercalates between the MoS2 layers but that after a certain concentration, it reacts with MoS2 to form Li2S. The calculations also support the non-reversibility of the conversion reaction, by showing that Mo + Li2S formation is energetically more favorable than the re-formation of MoS2 + Li. © 2014 the Partner Organisations.