Transition metal phosphorus trisulfide materials have received considerable research interest since the 1980–1990s as they exhibit promising energy conversion and storage properties. However, the mechanistic insights into Li-ion storage in these materials are poorly understood to date. Here, we explore the lithiation of NiPS3material by employing in situpair-distribution function analysis, Monte Carlo molecular dynamics calculations, and a series of ex situcharacterizations. Our findings elucidate complex ion insertion and storage dynamics around a layered polyanionic compound, which undergoes intercalation and conversion reactions in a sequential manner. This study of NiPS3material exemplifies the Li-ion storage mechanism in transition metal phosphorus sulfide materials and provides insights into the challenges associated with achieving reliable, high-energy phosphorus trisulfide systems.