Achieving homogeneous phase transition and uniform charge distribution is essential for good cycle stability and high capacity when phase conversion materials are used as electrodes. Herein, we show that chemical lithiation of bulk 2H-MoS2 distorts its crystalline domains in three primary directions to produce mosaic-like 1T′ nanocrystalline domains, which improve phase and charge uniformity during subsequent electrochemical phase conversion. 1T′-Li x MoS2, a macroscopic dense material with interconnected nanoscale grains, shows excellent cycle stability and rate capability in a lithium rechargeable battery compared to bulk or exfoliated-restacked MoS2. Transmission electron microscopy studies reveal that the interconnected MoS2 nanocrystals created during the phase change process are reformable even after multiple cycles of galvanostatic charging/discharging, which allows them to play important roles in the long term cycling performance of the chemically intercalated TMD materials. These studies shed light on how bulk TMDs can be processed into quasi-2D nanophase material for stable energy storage.