We report the observation of lithiation/delithiation of MoS2 nanosheets in a LiPF6/EC/DEC commercial electrolyte for the application of lithium ion batteries using electrochemical liquid cell transmission electron microscopy (TEM). Upon discharge in a voltage range of 1.8 ~ 1.2 V, MoS2 on the Ti electrode underwent irreversible decomposition resulting in shattering of the MoS2 nanosheets into 5 ~ 10 nm MoS2 nanoparticles. Repeated experiments also show that some MoS2 nanosheets do not decompose upon lithiation. Instead, lithiation induced structural expansion and deformation has been observed. A solid electrolyte interface (SEI) was formed on the anode side of the Ti electrode in contact with Li metal. The SEI layer is composed of LiF nanocrystals distributed within the entire layer with the constituent elements C, O and F. However, no passivation film was observed on the cathode side of the Ti electrode with MoS2 nanosheets on it. Such in situ electrochemical liquid cell TEM study shed light on battery degradation mechanisms.