We present herein that carbon nanospaces are the key reaction space to improve the reversibility of the reaction of SnO2 with Li-ions for lithium-ion batteries, demonstrated by both ex situ and in situ observations using high-resolution scanning transmission electron microscopy with electron energy loss spectroscopy. Conversion-type electrode materials, such as SnO2, undergo large volume changes and phase separation during the charge-discharge process, which lead to degradation in the battery performance. By confining the SnO2-Li reaction within carbon nanopores, the battery performance is improved. However, the exact phase changes of SnO2 in the nanospaces are unclear. By directly observing the electrodes during the charge-discharge process, the carbon walls are capable of preventing the expansion of SnO2 particles and minimizing the conversion-induced phase separation of Sn and Li2O on the sub-nanometer scale. Thus, nanoconfinement structures can effectively improve the reversibility performance of conversion-type electrode materials.