Rechargeable Li-S batteries are receiving ever-increasing attention due to their high theoretical energy density and inexpensive raw sulfur materials. However, rapid capacity fade has been one of the main barriers to further improvements in Li-S batteries and is expected to remain so for the near future. It is generally thought that polysulfide species dissolution and shuttle, nonconductive Li_­2S₂/Li₂S precipitation, and irreversible transformations of sulfur causes different degrees of the capacity fade. In an effort to analyze these degradation processes and elucidate the underlying mechanism of capacity fade, a comprehensive study of sulfur carbon nanotube composite electrodes in different amounts of electrolytes, is presented. Parameters obtained through electrochemical performance, EIS spectra and SEM figures are used to identify the primary cause of capacity fade. It was proved that the formation and accumulation of nonconductive Li₂S₂/Li₂S films on the surface of sulfur electrode was the major reason for the rapid capacity fade in current liquid-type Li-S batteries.