Lithium-metal (Li0) anodes potentially enable all-solid-state batteries with high energy density. However, it shows incompatibility with sulfide solid-state electrolytes (SEs). One strategy is introducing an interlayer, generally made of a mixed ionic-electronic conductor (MIEC). Yet, how Li behaves within MIEC remains unknown. Herein, we investigated the Li dynamics in a graphite interlayer, a typical MIEC, by using operando neutron imaging and Raman spectroscopy. This study revealed that intercalation-extrusion-dominated mechanochemical reactions during cell assembly transform the graphite into a Li-graphite interlayer consisting of SE, Li0, and graphite-intercalation compounds. During charging, Li+ preferentially deposited at the Li-graphite|SE interface. Upon further plating, Li0-dendrites formed, inducing short circuits and the reverse migration of Li0. Modeling indicates the interface has the lowest nucleation barrier, governing lithium transport paths. Our study elucidates intricate mechano-chemo-electrochemical processes in mixed conducting interlayers. The behavior of Li+ and Li0 in the interlayer is governed by multiple competing factors.