Sn2Fe anode materials were synthesized by a solvothermal route, and their electrochemical performance and reaction mechanism were evaluated. The structural evolution in the first two lithium cycles was investigated by X-ray absorption spectroscopy (XAS), synchrotron X-ray diffraction (XRD), and magnetic studies. In the first cycle, progressive alloying of Sn with Li accompanied by metallic iron displacement occurs upon lithiation, and the delithiation proceeds by Li x Sn dealloying and recovery of the Sn2Fe phase. In the second cycle, both XRD and XAS identify Li–Sn alloying at earlier lithiation stages than in the first cycle, with low-Li-content alloys evident in the beginning of the lithiation process. In the fully lithiated state, XAS analysis reveals higher coordination numbers in both the Li x Sn and Fe phases, which points toward more complete reaction and higher crystallinity of the products. Upon second delithiation, the Sn2Fe phase is generally reformed as evidenced by XRD. However, XAS indicates somewhat reduced Sn–Fe coordination and shorter Fe–Fe distance, which indicates incomplete reconversion and metallic Fe retention, which is also evident in the magnetic studies. Thus, a combination of long-range (XRD, magnetic) and local (XAS) techniques has revealed differences between the first and the second Li cycles relevant to the understanding of the capacity fading mechanisms.