Ambient atmosphere is critical for the surface/interface chemistry of electrodes that governs the operation and failure in energy storage devices (ESDs). Here, taking an Al/graphite battery as an example, both the relaxation and failure processes in the working graphite electrodes have been dynamically monitored by multiple in situ surface and interface characterization methods within various well-controlled atmospheres. Relaxation effects are manifested by recoverable stage-structure change and electronic relaxation occurring in anhydrous inert atmospheres and O2, which are induced by the anion/cation redistribution within the neighboring graphene layers and have slight influence on the long-term cycling. In contrast, rapid and unrecoverable failure behaviors happen in hydrous atmospheres as shown by the stage-structure degradation and electronic decoupling between guest ions and host graphite, which are caused by the hydrolysis between newly intercalated H2O molecules and intercalants. Consistent with the characterization results, exposure to H2O can cause nearly 100% capacity loss. The methodology and concept adopted in this work to unravel the battery mechanism under ambient conditions are universal and significant to investigate many ESDs.