Although widely used, the most promising Li-based technologies still suffer from a lack of suitable electrodes. There is therefore a need to seek new materials concepts to satisfy the increasing demands for energy storage worldwide. Here we report on a new layered electrode material, Cu(2.33)V(4)O(11), which shows a sustainable reversible capacity of 270 mA h g(-1) at a voltage of about 2.7 V, and electrochemically reacts with Li in an unusual and spectacular way. The reaction entails a reversible Li-driven displacement process leading to the growth and disappearance of Cu dendrites with a concomitant reversible decomposition and recrystallization of the initial electrode material. We show from structural considerations that the uniqueness of Cu(2.33)V(4)O(11) is rooted in the peculiar flexibility of the stacked [V(4)O(11)](n) layers, which is due to the presence of pivot oxygen atoms. Fully reversible displacement reactions could provide a new direction for developing an alternative class of higher energy density Li storage electrodes.