Aluminum foils are an appealing anode for lithium-ion batteries due to high capacity and low-cost, but their viability has been limited due to poor cyclability arising from pulverization and solid-electrolyte interphase growth. Here, we show that significant capacity degradation of aluminum foil anodes during electrochemical cycling also occurs due to diffusional lithium trapping. Scanning electron microscopy of cross-sectioned, cycled foils in the delithiated state reveals large regions of β-LiAl that are passivated by a surface layer of ⍺-Al, which has poor Li+ diffusivity. It is found that lithium diffusion occurs preferentially along the β-LiAl grain boundaries, so the grain structure after initial lithiation significantly affects the trapping behavior. Diffusional lithium trapping is exacerbated by both higher delithiation rates and higher areal capacity, presenting a challenge towards commercialization of aluminum foil anodes. We further demonstrate that diffusional trapping in aluminum foil anodes can be mitigated through alloy design, with the addition of 2–3 wt% Li yielding improved first cycle efficiency, and the addition of 1 wt% Si yielding improved cycle life. These results provide a mechanistic understanding of diffusional lithium trapping in aluminum foil anodes and highlight compositional design of alloys as a promising strategy to overcome it.