It was recently discovered that nanocrystals could be generated in glass anodes by Li-ion insertion, and thereby the cycling stability of Li-ion batteries was enhanced. Here we reveal the origins of both the nanocrystal formation and the enhancement of battery performances by exploring phase transitions, redox reactions, and structural heterogeneity in glass anodes. We infer that Li+ ions interact with the higher energy domains of structural network during discharging/charging, and some of the Li ions are incorporated into the structural network, and thereby the potential energy is lowered through nanocrystal formation. Upon 5000 discharging/charging cycles at a high current density of 1 A g−1, the nanocrystals in the 40TeO2–60V2O5 glass were identified to be γ-Li3VO4. Owing to the metastable nature of the γ-Li3VO4 phase, the glass anode becomes electrochemically active and highly ionic conductive. Simultaneously, the cycling stability is greatly enhanced by the nanostructured glass since the nanocrystals could suppress the propagation of micro-cracks generated by volume changes in glass matrix.