Nanocrystalline Al y Sn1−y O2−y/2 (y = 0.57, 0.4) was investigated as electrode material for lithium-ion batteries. Specific discharge capacities of about 400 mAh g− 1 were obtained for 100 cycles in the case of higher Al content. Electrochemical Li insertion/removal was studied by X-ray diffraction and 7Li/27Al/119Sn nuclear magnetic resonance as well as Sn Mössbauer spectroscopy for different Li contents. The formation of a ternary Li–Al–O matrix stabilizes the active Sn metal particles and prevents degradation during alloying with Li.