Nanoscale cracks within battery particles are ubiquitously induced during battery cycling. Tracking the origin of nanocrack formation and its subsequent propagation remains challenging, although it is crucial for the cycle life and kinetics of batteries. Moreover, it is even more challenging to understand how such nanocracks influence lithium (de)insertion pathways and local strain fields within battery particles. In this study, we utilized <i>operando</i> scanning transmission X-ray microscopy on individual LiFePO₄ (LFP) particles to visualize the relationship between lithium (de)insertion pathways and crack formation and propagation. We first demonstrate the generation mechanism of nanocracks occurs when the lithium insertion pathway at the edge of fresh LFP particles induces strong tensile stress in the middle of the particle. Then, we directly observe the nanocrack propagation mechanism, where the freshly exposed surface near the crack activates a fast lithium (de)insertion pathway, completely altering the internal stress fields near the nanocrack. Once the nanocrack transforms the dynamic lithium pathway and distribution, the delithiation process induces crack-opening tensile stress, while the lithiation process generates crack-closing compressive stress. 3D phase-field simulations support these observations, showing how dynamic lithium distribution shapes stress fields. Our findings reveal a recursive chemo-mechanical loop involving lithium (de)insertion pathways, internal stress fields, and crack development.