Tin oxide (SnO₂) has attracted a lot of attention among lithium ion battery anode materials due to its rich reserves, high theoretical capacity, and safe potential. However, the mechanism of the SnO₂ nano materials in the lithiation-delithiation reaction, especially whether the first-step conversion reaction is reversible, is still controversial. In this paper, SnO₂ nanoparticles with an average particle size of 4.4 nm are successfully prepared via a simple hydrothermal method. A nanosized lithium ion battery that enables the in situ electrochemical experiments of SnO₂ nanoparticles is constructed to investigate the electrochemical behavior of SnO₂ in lithiation-delithiation process. Briefly, the nanosized electrochemical cell consists of a SnO₂ working electrode, a metal lithium (Li) counter electrode on a sharp tungsten probe, and a solid electrolyte of lithium oxide (Li₂O) layer naturally grown on the surface of metal Li. Then, the whole lithiation-delithiation process of SnO₂ nanocrystals is tracked in real time. When a constant potential of –2 V is applied to the SnO₂ with respect to lithium, lithium ions begin to diffuse from one side of the nanoparticles, which is in contact with the Li/Li₂O layer, and gradually propagate to the other side. Upon the lithiation, a two-step conversion reaction mechanism is revealed: SnO₂ is first converted into intermediate phase of Sn with an average diameter of 4.2 nm which is then further converted into Li₂₂Sn₅. Upon the delithiation, a potential of 2 V is applied and Li₂₂Sn₅ phase can be reconverted into SnO₂ phase when completely delithiated. It is because the interfaces and grain boundaries of nano-sized SnO₂ may impede the Sn diffusing from one grain into another during lithiation/delithiation and then suppress the coarsening of Sn, and enable the Li₂O and Sn to be sufficiently contacted with each other and then converted into SnO₂. This work provides a valuable insight into an understanding of phase evolution in the lithiation-delithiation process of SnO₂ and the results are of great significance for improving the reversible capacity and cycle performance of lithium ion batteries with SnO₂ electrodes.