High capacity Li-rich layered cathode Li(Li(0.2)Mn(0.54)Ni(0.13)Co(0.13))O(2) and doped one are investigated to understand mechanisms of capacity fade as well as voltage decrease upon long-term cycling. Detailed electrochemical analysis reveals a phase-separation-like behavior with increase in the cycle number, which is responsible for gradual reduction in discharge voltage. X-ray photoelectron spectroscopy (XPS), transmission electron microscope coupled with energy dispersive X-ray spectroscopy (TEM-EDS) and inductively coupled plasma emission spectrometry (ICP) analysis results show increase in valence of transition metals on the surface of powder at a fully discharged state in addition to surface dissolution of Ni, leading to rapid capacity loss. High resolution transmission electron microscopy (HR-TEM) shows a phase transformation from original layered structure into spinel-like nano-domains in local structure. Though such an unexpected structural change is unfavorable because of lower output voltage, it is observed to be beneficial for high-rate performance.