The conversion reaction is important in lithium-ion batteries because it governs the overall battery performance, such as initial Coulombic efficiency, capacity retention, and rate capability. Here, we have demonstrated in situ observation of the complete conversion reaction and agglomeration of nanoparticles (NPs) upon lithiation by using graphene liquid cell transmission electron microscopy. The observation reveals that the Sn NPs are nucleated from the surface of SnO2, followed by merging with each other. We demonstrate that the agglomeration has a stepwise process, including rotation of a NP, formation of necks, and subsequent merging of individual NPs.