Silicon-based material is one of the most promising substitutes of widely used graphite anodes for the next generation Li-ion batteries due to its high theoretical capacity, low working potential, environmental friendliness, and abundant natural resource. However, the huge volume expansion and serious interfacial side reactions during lithiation and delithiation progresses of the silicon anode are the key issues which impede their further practical applications. Rational designs of silicon nanostructures are effective ways to address these problems. In this progress report, we firstly highlight the fundamental scientific problems, and then focus on recent progresses in design, preparation, in-situ characterization methods and failure mechanism of nanostructured silicon anode for high capacity lithium battery. We also summarize the key lessons from the successes so far and offer perspectives and future challenges to promote the applications of silicon anode in practical lithium batteries.