This study investigates the electrochemical behavior of molybdenum disulfide (MoS2) as an anode in Li-ion batteries, focusing on the extra capacity phenomenon. Employing advanced characterization methods such as in situ and ex situ X-ray diffraction, Raman spectroscopy, X-ray photoelectron spectroscopy, and transmission electron microscopy, the research unravels the complex structural and chemical evolution of MoS2 throughout its cycling. A key discovery is the identification of a unique Li intercalation mechanism in MoS2, leading to the formation of reversible LixMoS2 phases that contribute to the extra capacity of the MoS2 electrode. Density function theory calculations suggest the potential for overlithiation in MoS2, predicting Li5MoS2 as the most energetically favorable phase within the lithiation-delithiation process. Additionally, the formation of a Li-rich phase on the surface of Li4MoS2 is considered energetically advantageous. After the first discharge, the battery system engages in two main reactions. One involves operation as a Li-sulfur battery within the carbonate electrolyte, and the other is the reversible intercalation and deintercalation of Li in LixMoS2. The latter reaction contributes to the extra capacity of the battery. The incorporation of reduced graphene oxide as a conductive additive in MoS2 electrodes notably improves their rate capability and cycling stability.