We use a unique transmission electron microscope (TEM) technique to show that Si nanowires (NWs) with diameters in the range of a few hundred nanometers can be fully lithiated and delithiated without fracture, in spite of the large volume changes that occur in this process. By analyzing the stresses associated with lithiation and delithiation we conclude that the process does not occur by the growth of discrete crystalline phases; rather it occurs by amorphization of the Si NWs followed by diffusion of Li into the structure. By accounting for the large deformation associated with this process and by including the effects of pressure gradients on the diffusion of Li, we show that Si NWs with diameters less than about 300 nm could not fracture even if pre-existing cracks were present in the NW. These predictions appear to be in good agreement with the experiment.