The lithium–sulfur (Li–S) battery is a promising next-generation energy storage technology because of its high theoretical energy and low cost. Extensive research efforts have been made on new materials and advanced characterization techniques for mechanistic studies. However, it is uncertain how discoveries made on the material level apply to realistic batteries due to limited analysis and characterization of real high-energy cells, such as pouch cells. Evaluation of pouch cells (>1 A h) (instead of coin cells) that are scalable to practical cells provides a critical understanding of current limitations which enables the proposal of strategies and solutions for further performance improvement. Herein, we design and fabricate pouch cells over 300 W h kg⁻¹, compare the cell parameters required for high-energy pouch cells, and investigate the reaction processes and their correlation to cell cycling behavior and failure mechanisms. Spatially resolved characterization techniques and fluid-flow simulation reveal the impacts of the liquid electrolyte diffusion within the pouch cells. We found that catastrophic failure of high-energy Li–S pouch cells results from uneven sulfur/polysulfide reactions and electrolyte depletion for the first tens of cycles, rather than sulfur dissolution as commonly reported in the literature. The uneven reaction stems from limited electrolyte diffusion through the porous channels into the central part of thick cathodes during cycling, which is amplified both across the sulfur electrodes and within the same electrode plane. A combination of strategies is suggested to increase sulfur utilization, improve nanoarchitectures for electrolyte diffusion and reduce consumption of the electrolytes and additives.