NaAlH4 is a promising anode material for lithium-ion batteries due to its high theoretical capacity of 1985mAhg−1. However, the practical application of NaAlH4 anode is hindered by its low charge reversibility and poor cycle performance. To improve the Li-storage performance of NaAlH4 anode, the regeneration and degradation mechanism of NaAlH4 have been revealed in this work. Firstly, the results show that decreasing the crystalline size would result in the direct regeneration of NaAlH4 from Na and Al without any intermediate phases (such as LiNa2AlH6), which dramatically enhances the reversibility of NaAlH4 anode. Secondly, a new cycle degradation mechanism is demonstrated that NaAlH4 would decompose above 1.42V during the charge process, which leads to a rapid degradation of cycle capacity. Therefore, the reversible capacity of NaAlH4 anode after 20 cycles could be significantly increased from 89mAhg−1 to 456mAhg−1 by decreasing the cut-off voltage from 3V to 1V, showing an improved cycle stability.