Room-temperature sodium-ion batteries attract increasing attention for large-scale energy storage applications in renewable energy and smart grid. However, the development of suitable anode materials remains a challenging issue. Here we demonstrate that the spinel Li4Ti5O12, well-known as a 'zero-strain' anode for lithium-ion batteries, can also store sodium, displaying an average storage voltage of 0.91 V. With an appropriate binder, the Li4Ti5O12 electrode delivers a reversible capacity of 155 mAh g(-1) and presents the best cyclability among all reported oxide-based anode materials. Density functional theory calculations predict a three-phase separation mechanism, 2Li4Ti5O12+6Na(+)+6e(-)↔Li7Ti5O12+Na6LiTi5O12, which has been confirmed through in situ synchrotron X-ray diffraction and advanced scanning transmission electron microscope imaging techniques. The three-phase separation reaction has never been seen in any insertion electrode materials for lithium- or sodium-ion batteries. Furthermore, interfacial structure is clearly resolved at an atomic scale in electrochemically sodiated Li4Ti5O12 for the first time via the advanced electron microscopy.