A unique in-situ morphology transition from multiwall carbon nanotubes (MWCNT) to graphene nanosheets (GNS) upon Li intercalation results in enormous increase in capacity of SnO2/MWCNT composites anode during cycling. The anode capacity increases from 330mAhg−1 to 500mAhg−1 which is more than 50% of its initial capacity when cycled at a current density of 200mAg−1. Further when the sample is cycled at a high current density of 500mAg−1 the composite sample shows a stable capacity of 400 mAhg−1 for 100 cycles which is attributed to the complete transition of MWCNT to GNSs as confirmed from the high resolution transmission electron microscope (HRTEM) images. First principles density functional theory calculations have been carried out to validate possibility of this morphological transition upon Li intercalation and the results agree well with the experimental findings.