The effect of electrode density for lithium intercalation and irreversible capacity loss on the natural graphite anode in lithium ion batteries was studied by electrochemical methods. Both the first-cycle reversible and irreversible capacities of the natural graphite anode decreased with an increase in the anode density though compression. The reduction in reversible capacity was attributed to a reduction in the chemical diffusion coefficient for lithium through partially agglomerated particles with a larger stress. For the natural graphite in this study the potentials for Li (de)insertion shifted between the first and second formation cycles and the extent of this shift was dependent on electrode density. The relation between this peak shift and the irreversible capacity loss is probably due to the decrease in graphite surface area with compression.