Mg-Sn nanoparticles were prepared by an arc-discharge method in a mixture atmosphere of argon and hydrogen gases. Phases, morphologies, and microstructures of the nanoparticles were investigated by means of X-ray diffraction (XRD) and high-resolution transmission electron microscopy (HRTEM). It was found that the intermetallic compound of $Mg_2Sn$ was generated and coexisted with metallic phases of Mg and Sn within nanoparticles. Basedon the model cell, the electrochemical properties were also explored by discharge-charge cycling, cyclic voltammetry, and electrochemical impedance spectroscopy. The initial capacity of the first cycle reached 430 mAh/g. Two visible plateaus at 0.2-0.3 and 0.5-0.75V were observed in the potential profiles, which can attributed to alloying/de-alloying reactions between Li and Mg2Sn, respectively.