We have examined the evolution of the oxidation state and atomic structure of vanadium(V) in discharged and charged nanophase vanadium pentoxide (V2O5) aerogel cathodes under in situ conditions using X-ray absorption spectroscopy (XAS). We show that the oxidation state of V in V2O5 aerogel cathode heated under vacuum (100 muTorr) at 220 degreesC for 20.5 h is similar to that of V in a commercially obtained sample of orthorhombic V2O5. In addition, lithium (Li) insertion during the first cycle of discharging leads to the reduction of V(V) to V(IV) and V(IV) to V(III) in a manner consistent with the stoichiometry of the sample (i.e. LixV2O5). Li extraction during charging leads to oxidation of V(III) to V(IV) and then V(IV) to V(V). Furthermore, the oxidation state of V in fully charged cathodes remains unchanged with cycling (upto at least the 16th cycle) from that of V in the control V2O5 aerogel cathode. However, the average oxidation state of V in discharged V2O5 cathodes increased with cycling. Moreover, the local structure of V in the discharged state has a higher degree of symmetry than that of the fully charged state. A significant change in the structure of the V-V correlation of discharged cathodes is observed with cycling indicating the formation of electrochemically irreversible phases.