LAUSR

Understanding electron correlation-driven instabilities and their coupling to structural phases is essential for deciphering multiorbital pairing in unconventional superconductors. We investigate Li x (C5H5N) y Fe2Se2 (x ∼ 0.6; y ∼ 0.7–0.9), a tetragonal β-FeSe intercalate with a superconducting transition temperature (T c = 39 K) closely tied to an expanded Fe-layer spacing (∼11.4 Å). High-resolution synchrotron X-ray diffraction and core-level absorption spectroscopy reveal subtle lattice distortions on cooling without a symmetry-breaking transition. Instead, the material exhibits negative thermal expansion (NTE) in the two-dimensional Fe network below T S ∼ 70 K, and stiffening of local Se–Fe–Se bond dynamics near T c. The spatially incoherent rearrangement of FeSe4 tetrahedra and the site-local fluctuations, signal reduced electron correlations compared to those of parent β-FeSe (T c = 8 K). Complementary X-ray emission spectroscopy, a fast local probe of Fe 3d valence states, detects persistent local Fe spin moments below T S, unlike quenching in related systems. These findings indicate that decoupling of Fe planes leads to an electronically driven lattice instability. The latter emerges as NTE induced from weak, orbital-selective localization of in-plane Fe 3d states rather than conventional transverse vibrations. Governed by Hund’s coupling, this selectivity permits coexistence of local spin fluctuations with itinerant d-electronscritical for enhancing T c. These results suggest that intercalation-driven d-orbital differentiation moderates electron correlations, providing a pathway to optimize the superconductivity in low-dimensional quantum materials.