Lithium-ion batteries can rupture, ignite, or explode when exposed to high temperature. Short-circuiting a battery will cause the cell to overheat and possibly to catch fire. Adjacent cells may then overheat and fail, possibly causing the entire battery to ignite or rupture. In the event of a fire, the device may emit dense irritating smoke.

Replacing the lithium cobalt oxide cathode material in lithium-ion batteries with a lithium metal phosphate such as lithium iron phosphate, improves cycle counts, shelf life and safety, but lowers capacity. Currently, these 'safer' lithium-ion batteries are mainly used in electric cars and other large-capacity battery applications, where safety issues are critical.

Lithium-ion batteries normally contain safety devices to protect the cells from disturbance. However, contaminants inside the cells can defeat these safety devices.