We report in situ measurements of stress evolution in a silicon thin-film electrode during electrochemical lithiation and delithiation by using the multi-beam optical sensor (MOS) technique. Upon lithiation, due to substrate constraint, the silicon electrode initially undergoes elastic deformation, resulting in rapid rise of compressive stress. The electrode begins to deform plastically at a compressive stress of ca. −1.75 GPa; subsequent lithiation results in continued plastic strain, dissipating mechanical energy. Upon delithiation, the electrode first undergoes elastic straining in the opposite direction, leading to a tensile stress of ca. 1 GPa; subsequently, it deforms plastically during the rest of delithiation. The plastic flow stress evolves continuously with lithium concentration. Thus, mechanical energy is dissipated in plastic deformation during both lithiation and delithiation, and it can be calculated from the stress measurements; we show that it is comparable to the polarization loss. Upon current interruption, both the film stress and the electrode potential relax with similar time constants, suggesting that stress contributes significantly to the chemical potential of lithiated silicon.