Bismuth nanoparticles wrapped by graphene have been synthesized. Refined X-ray diffraction, scanning electron microscopy, and transmission electron microscopy analyses have revealed the phase, crystal structure, and morphology of the Bi@graphene nanocomposite. When applied as anode in Na-ion batteries, Bi@graphene nanocomposite exhibited a high reversible sodium storage capacity of about 561mAhg−1 within the 2.0–0.01V voltage range and 358mAhg−1 within the 0.9–0.3V voltage range. Ex-situ X-ray diffraction measurements were used to study the reaction mechanism with Na. It was found that bismuth does not follow the alloying mechanism with Na, and surprisingly, an intercalation process has been evidenced. The as-prepared Bi@graphene nanocomposite also demonstrated excellent high rate performance. This superior electrochemical performance could be ascribed to the unique layered crystal structure of Bi, which has large interlayer spacing along the c-axis (d(003)=3.95Å) to accommodate the Na ions. Furthermore, the three-dimensional architecture of the Bi@graphene nanocomposite also contributes to better conductivity and stability of the electrodes. Via density function theory calculations, it was found that the Bi could provide facile sites for Na ion diffusion and accommodation, based on the intercalation mechanism instead of the alloying process.