The mechanism of Li insertion into Sn3InSb4 alloy is investigated by means of the first-principle plane-wave pseudo-potential method. The lithium intercalation formation, the theoretical capacity, the volume expansion ratio and the electronic structures are calculated. In the intercalation process, lithium atoms firstly fill the interstitial sites, and then lithium atoms continue to replace the metal atoms. Large expansion ratio from 11.74% to 43.40% would lead to the bad cycle stability for Sn3InSb4 alloy as the lithium battery electrode material. The conduct electricity is improved with lithium content increasing, then the conduct electricity decreases with interstitial sites being filled with lithium atoms and Sn-replacement reaction occurring.