Anode materials combining conversion and alloying mechanisms are increasingly valued in advanced rechargeable batteries for their exceptional theoretical capacities and advantageous working voltages. This study showcases BiSCl as a promising conversion/alloying anode material, demonstrating a high specific capacity and enhanced durability through polypyrrole encapsulation. Employing in situ X-ray diffraction, X-ray photoelectron spectroscopy, ex situ transmission electron microscopy, and field emission scanning electron microscopy, we offer a detailed analysis of the lithiation mechanism in BiSCl. The anode exhibits a low average working potential of approximately 0.6 V, supporting a theoretical specific capacity of 784 mAh/g and a volumetric capacity of 4664 mAh/cm3. The innovative BiSCl-PPy core-shell composite effectively addresses the challenges of volumetric expansion and polysulfide dissolution. This composite delivers a remarkable reversible capacity of 753 mAh/g at a current rate of 100 mA/g, maintaining 96% of its specific capacity over 400 cycles, and sustains 419 mAh/g at 500 mA/g after 800 cycles, demonstrating more superior performance than that of BiSCl. These findings establish BiSCl as a highly promising conversion/alloying anode material for lithium storage, significantly enhanced in durability by the BiSCl-PPy core-shell composite.