Li1.1V3O8 nanograins synthesized via the sol-gel route suffer from strong capacity fading on cycling. The latter is characterized by the emergence of polarized redox processes at the expense of initial ones. From present investigations, bulk Li1.1V3O8 is not altered during the fading process, although parts of the electrode show a decreasing reactivity. Scanning electron microscopy images show that on cycling, a layer forms at the positive electrode-electrolyte interface and propagates toward the current collector side. Concomitantly, X-ray photoelectron spectroscopy and electrical impedance spectroscopy results indicate that a layer stabilizes on cycling at the surface of active material grains. Partial recovery of initial characteristics both in terms of capacity and electrochemical behavior is obtained once this layer is removed. Correlation of all results suggests that fading mainly stems from the occurrence of an original mechanism based on a partial to complete insulation of initial active nanograins.