Rechargeable magnesium (Mg) batteries have been attracting increasing attention recently because of the abundance of the raw material, their relatively low price and their good safety characteristics. However, rechargeable Mg batteries are still in their infancy. Therefore, alternate Mg-ion insertion anode materials are highly desirable to ultimately mass-produce rechargeable Mg batteries. In this study, we introduce the spinel Li4Ti5O12 as an Mg-ion insertion-type anode material with a high reversible capacity of 175mAh g(-1). This material possesses a low-strain characteristic, resulting in an excellent long-term cycle life. The proposed Mg-storage mechanism, including phase separation and transition reaction, is evaluated using advanced atomic scale scanning transmission electron microscopy techniques. This unusual Mg storage mechanism has rarely been reported for ion insertion-type electrode materials for rechargeable batteries. Our findings offer more options for the development of Mg-ion insertion materials for long-life rechargeable Mg batteries.