SnO2 attracts considerable interest as a promising high-capacity anode material for lithium ion batteries. It is believed that SnO2 stores lithium by the alloying and de-alloying reactions after the initial irreversible reduction from SnO2 to Li2O and metallic Sn. Here we report that a reversible conversion reaction, similar to that often observed in transition metal oxides, can occur in the cycling of the carbon-coated SnO2 hollow microspheres (SnO2/C), as is evidenced by Raman spectroscopy, high-resolution transmission electron microscopy (HRTEM) and theoretical calculations. However, only alloying and de-alloying reactions can reversibly take place in carbon-free SnO2 hollow microspheres. The reversible capacity of the SnO2/C is even higher than the theoretical capacity of the free SnO2. These findings provide guidance to designing anode materials with higher reversible capacities.