We report on the origin of the surface structural disordering in graphite anodes induced by lithium intercalation and deintercalation processes. Average Raman spectra of graphitic anodes reveal that cycling at potentials that correspond to low lithium concentrations in Li x C (0≤ x <0.16) is responsible for most of the structural damage observed at the graphite surface. The extent of surface structural disorder in graphite is significantly reduced for the anodes that were cycled at potentials where stage-1 and stage-2 compounds (x >0.33) are present. Electrochemical impedance spectra show larger interfacial impedance for the electrodes that were fully delithiated during cycling as compared to electrodes that were cycled at lower potentials (U <0.15V vs. Li/Li+). Steep Li+ surface-bulk concentration gradients at the surface of graphite during early stages of intercalation processes, and the inherent increase of the Li x C d-spacing tend to induce local stresses at the edges of graphene layers, and lead to the breakage of C–C bonds. The exposed graphite edge sites react with the electrolyte to (re)form the SEI layer, which leads to gradual degradation of the graphite anode, and causes reversible capacity loss in a lithium-ion battery.