SnO 2 ‐based lithium‐ion batteries have low cost and high energy density, but their capacity fades rapidly during lithiation/delithiation due to phase aggregation and cracking. These problems can be mitigated by using highly conducting black SnO 2− x , which homogenizes the redox reactions and stabilizes fine, fracture‐resistant Sn precipitates in the Li 2 O matrix. Such fine Sn precipitates and their ample contact with Li 2 O proliferate the reversible Sn → Li x Sn → Sn → SnO 2 /SnO 2− x cycle during charging/discharging. SnO 2− x electrode has a reversible capacity of 1340 mAh g −1 and retains 590 mAh g −1 after 100 cycles. The addition of highly conductive, well‐dispersed reduced graphene oxide further stabilizes and improves its performance, allowing 950 mAh g −1 remaining after 100 cycles at 0.2 A g −1 with 700 mAh g −1 at 2.0 A g −1 . Conductivity‐directed microstructure development may offer a new approach to form advanced electrodes.