In-situ X-ray absorption spectroscopy (XAS) was used to elucidate the structural variation of $alpha-MoO_3$ electrode upon discharge/charge reaction in a lithium ion battery. According to the XAS analysis, hexavalent Mo atoms in $alpha-MoO_3$ framework are reduced as the amount of intercalated lithium ions increases. As lithium de-intercalation proceeds, most of pre-edge peaks are restored again. However, according to the Fourier transforms of the extended X-ray absorption fine structure (EXAFS) spectra, lithium de-intercalation reaction is partially irreversible upon the charge reaction, which is one of the main reasons why the capacity of $alpha-MoO_3$ electrode decreases upon successive discharge/charge cycles.