On the basis of density functional theory calculations, we present the bonding and dynamic behavior of Li atoms in crystalline Si and how the incorporation of Li atoms affects the structure and stability of the host Si lattice. Our calculations clearly evidence that the inserted Li atom energetically prefers a tetrahedral interstitial site while exhibiting a shallow donor level. Because of their positive ionization, the interactions between neutral Li impurities are repulsive, suggesting that they favorably remain isolated, rather than clustered. We also find that the charge transferred from neutral Li is largely localized within the first nearest Si atoms, thereby effectively screening the positively ionized Li. In addition, our electronic structure analysis highlights that the charge transfer leads to a significant weakening of nearby Si-Si bonds by filling the antibonding sp3 states of Si. The mobility of Li interstitials is also estimated in the neutral and positive charge states.