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Internal short-circuit in a lithium-ion cell causes an abrupt increase in cell temperature and triggers subsequent thermal runaway. In this work, we present a detailed electrochemical-thermal model to investigate the physical behavior during an internal short-circuit. Simulations at wide range of heat transfer coefficients and short-circuit resistances are conducted to illustrate electrochemical and thermal behavior under a wide range of conditions. The Joule heating at the shorted region promotes electrochemical reactions nearby, causing in-plane non-uniformity of electrolyte and active material transport. Furthermore, it is found that diffusion in solid active materials plays a significant role at very high shorting currents (∼20 C), as electrochemical reactions rate are being controlled progressively more by availability of Li+ at the interface, due to limitations in diffusion through the active material with increasing discharge rates. This diffusion limitation causes a drop in available energy, and subsequently a decrease in cell equilibrium potential and the heat generation rate at the location of the short. On the other hand, rapid depletion of lithium concentration in the electrolyte and accumulation on the electrode surface results in highly non-uniform transport properties resulting in higher heat generation rates. Hence, the heating regime shifts from “local heating” to “global heating”. Based on the findings, important design parameters for battery safety are discussed.