In lithium-ion batteries (LIBs), many promising electrodes that are based on transition metal oxides exhibit anomalously high storage capacities beyond their theoretical values. Although this phenomenon has been widely reported, the underlying physicochemical mechanism in such materials remains elusive and is still a matter of debate. In this work, we use in situ magnetometry to demonstrate the existence of strong surface capacitance on metal nanoparticles, and to show that a large number of spin-polarized electrons can be stored in the already-reduced metallic nanoparticles (that are formed during discharge at low potentials in transition metal oxide LIBs), which is consistent with a space charge mechanism. Through quantification of the surface capacitance by the variation in magnetism, we further show that this charge capacity of the surface is the dominant source of the extra capacity in the Fe3O4/Li model system, and that it also exists in CoO, NiO, FeF2 and Fe2N systems. The space charge mechanism revealed by in situ magnetometry can therefore be generalized to a broad range of transition metal compounds for which a large electron density of states is accessible, and provides pivotal guidance for creating advanced energy storage systems.