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Aluminum foil anodes have the potential to significantly improve the energy density, safety, cost, and sustainability of Li-ion batteries (LIB). However, their adoption is limited by their notoriously poor cycle life, and the dramatic structural transformations of Al foil anodes during formation and cycling remain poorly understood. In this work, we investigate how the nucleation and growth kinetics of LiAl control the microstructural evolution and cycle life of Al foil anodes. First, we demonstrate the unique sensitivity of Al foil anodes to the cell design and cycling conditions and emphasize the necessity of electrochemical testing in practical full cells. Operando electrochemical impedance spectroscopy (EIS) is combined with scanning electron microscope (SEM) imaging of the lithiated foils to elucidate the relationships between LiAl nucleation kinetics and the resulting LiAl microstructure. Particularly, we investigate the effects of annealing the pristine foils, and controlling the overpotential and temperature during formation, showing that as-rolled foils lithiated at high overpotentials give a columnar LiAl microstructure. Finally, we show that uncontrolled LiAl nucleation during cycling quickly destroys this favorable columnar structure, and a significant improvement in cycle life of LiFePO₄|| Al full cells is achieved by limiting the depth-of-discharge to <75%.