Lithium sulfide (Li2S) is one of the promising positive electrode materials for next-generation rechargeable lithium batteries. To improve the electrochemical performance of electronically resistive Li2S, a Fe-doped Li2S-based positive electrode material (Li8FeS5) has been recently designed and found to exhibit excellent discharge capacity close to 800 mAh g−1. In the present study, we investigate the structural and dynamic behavior of Li8FeS5 during charge–discharge cycling. In Li8FeS5, Fe ions are incorporated into the Li2S framework structure. The Li2S-based structure is found to transform to an amorphous phase during the charge process. The delithiation-induced amorphization is associated with the formation of S-S polysulfide bonds, indicating charge compensation by S ions. The crystalline to non-crystalline structural transformation is reversible, but Li ions are extracted from the material via a two-phase reaction, although they are inserted via a single-phase process. These results indicate that the delithiation/lithiation mechanism is neither a topotactic extraction/insertion nor a conversion-type reaction. Moreover, the activation energies for Li ion diffusion in the pristine, delithiated, and lithiated materials are estimated to be in the 0.30–0.37 eV range, which corresponds to the energy barriers for local hopping of Li ions along the Li sublattice in the Li2S framework.