The mechanism of Li insertion in eta'-Cu6Sn5 to form Li2CuSn is discussed in detail, based on both theoretical calculations and experimental results. The mechanism is investigated by means of first principles calculations, with the full potential linearized augmented plane wave method, in combination with in situ X-ray diffraction experiments. The eta'-Cu6Sn5 structure, as well as its lithiated products, were optimized and the electronic charge density calculated in order to study the change in bond character on lithiation. The average insertion voltage of the eta'-Cu6Sn5-Li2CuSn transformation has been calculated to be 0.378 V, in good agreement with the experimental value. (C) 2003 The Electrochemical Society.