The high theoretical gravimetric capacity of the Li-S battery system makes it an attractive candidate for numerous energy storage applications. In practice, cell performance is plagued by low practical capacity and poor cycling. In an effort to explore the mechanism of the discharge with the goal of better understanding performance, we examine the Li-S phase diagram using computational techniques and complement this with an in situ Li-7 NMR study of the cell during discharge. Both the computational and experimental studies are consistent with the suggestion that the only solid product formed in the cell is Li2S, formed soon after cell discharge is initiated. In situ NMR spectroscopy also allows the direct observation of soluble Li+-species during cell discharge; species that are known to be highly detrimental to capacity retention. We suggest that during the first discharge plateau, S is reduced to soluble polysulfide species concurrently with the formation of a solid component (Li2S) which forms near the beginning of the first plateau, in the cell configuration studied here. The NMR data suggest that the second plateau is defined by the reduction of the residual soluble species to solid product (Li2S). A ternary diagram is presented to rationalize the phases observed with NMR during the discharge pathway and provide thermodynamic underpinnings for the shape of the discharge profile as a function of cell composition.