The　real-time　charge　and　discharge　processes　of　a　single　phase　nanocrystalline　Li2C2　alloy　were　directly　observed　by　in　situ　transmission　electron　microscopy.　Upon　lithiation,　nanocrystalline　Li2C2　exhibits　obvious　volume　expansion　and　morphology　change,　and　an　amorphous　structure　is　generated　from　the　nanocrystalline　matrix.　The　change　of　structure　affects　the　cycling　stability　of　nanocrystalline　Li2C2　as　a　cathode　material.　To　reduce　the　effect　of　the　structural　change,　the　degree　of　delithiation　was　optimized　by　controlling　the　charge/discharge　voltage　range　in　the　electrochemical　tests.　A　high　initial　specific　capacity　of　352　mA　h　g(-1)　was　obtained　for　nanocrystalline　Li2C2,　and　a　discharge　capacity　of　171　mA　h　g(-1)　was　maintained　after　50　cycles.　The　present　work　proposed　a　new　alloy-type　cathode　material　of　nanocrystalline　Li2C2　for　lithium　ion　batteries　with　promising　electrochemical　performance.