We reported the theoretical understandings of the detailed structural and thermodynamic mechanism of the actual lithiation process of silicon nanoparticle systems based on atomistic simulation approaches. We found that the rearrangement of the Si bonding network is the key mechanism of the lithiation process, and that it is less frequently broken by lithiation in the smaller sizes of Si nanoparticles. The decreased lithiation ability of the Si nanoparticles results in the lithiation potential being significantly lower than that of crystalline silicon phases, which impedes the full usage of the theoretical maximum capacity. Thus, nanosized Si materials could have a negative effect on performance if they become too fine-sized. These findings provide a detailed view of the electrochemical lithiation process of silicon nanoparticles (Si NPs) and engineering guidelines for designing new Si-based nanostructured materials.