Sn based anodes allow for high initial capacities, which however cannot be retained due to the severe mechanical damage that occurs during Li-insertion and de-insertion. To better understand the fracture process during electrochemical cycling three different nanopowders comprised of Sn particles attached on artificial graphite, natural graphite or micro-carbon microbeads were examined. Although an initial capacity of 700mAhg−1 was obtained for all Sn–C nanopowders, a significant capacity fade took place with continuous electrochemical cycling. The microstructural changes in the electrodes corresponding to the changes in electrochemical behavior were studied by transmission and scanning electron microscopy. The fragmentation of Sn observed by microscopy correlates with the capacity fade, but this fragmentation and capacity fade can be controlled by controlling the initial microstructure. It was found that there is a dependence of the capacity fade on the Sn particle volume and surface area fraction of Sn on carbon.