TiO2 (B) has attracted considerable attention in recent years because it exhibits the largest capacity among all studied titania polymorphs, with high rate performance for Li intercalation being achieved when this material is nanostructured. However, due to the complex nature of its lithiation mechanism and practical challenges in probing Li structure in nanostructured materials, a definitive understanding of the lithiation thermodynamics has yet to be established. A comprehensive mechanistic investigation of the TiO2 (B) nanoparticles is therefore presented using a combination of in situ/operando X-ray pair distribution function (PDF) and electrochemical techniques. The discharge begins with surface reactions in parallel with Li insertion into the subsurface of the nanoparticles. The Li bulk insertion starts with a single-phase reaction into the A2 site, a position adjacent to the b-channel. A change of the Li diffusion pathway from that along this open channel to that along the c-direction is likely to occur at the composition of Li0.25TiO2 until Li0.5TiO2 is attained, leading to a two-step A2-site incorporation with one step kinetically distinct from the other. Subsequent Li insertion involves the C′ site, a position situated inside the channel, and follows a rapid two-phase reaction to form Li0.75TiO2. Due to the high diffusion barrier associated with the further lithiation, Li insertion into the A1 site, another position adjacent to the channel neighboring the A2 sites, is kinetically restricted. This study not only explores the lithiation reaction thermodynamics and mechanisms of nanoparticulate TiO2 (B) but also serves as a strong reference for future studies of the bulk phase, and for future calculations to study the Li transport properties of TiO2 (B).