Iron oxide (mostly α-Fe2O3) model thin-film electrodes were prepared by thermal oxidation of pure metal iron substrates at 300 ± 5 °C in air and used for comprehensive investigation of the lithiation/delithiation mechanisms of anode material undergoing an electrochemical conversion reaction with lithium ions. Surface (X-ray photoelectron spectroscopy (XPS) and time-of-flight secondary ion mass spectrometry (ToF-SIMS)) and electrochemical (cyclic voltammetry (CV) and electrochemical impedance spectroscopy (EIS)) analytical techniques were combined. The results show that intercalation of Li in the Fe2O3 matrix and solid electrolyte interphase (SEI) layer formation both precede conversion to metallic iron and Li2O upon lithiation. Depth profile analysis evidences stratification of the converted thin-film electrode into fully and partially lithiated outer and inner parts, respectively, due to mass transport limitation. The SEI layer has a stable composition (Li2CO3 with minor ROCO2Li) but dynamically increases/decreases in thickness upon lithiation/delithiation. Conversion, proceeding mostly in the outer part of the electrode, causes material swelling accompanied by SEI layer thickening. Upon delithiation, lithium is trapped in the deconverted electrode subjected to shrinking, and the SEI layer mostly decomposes and reduces in thickness after deconversion. The nonreversibility of both conversion and surface passivation mechanisms is demonstrated.