Synthesis and structural characterization of the first LiFeO2 compound with tetrahedrally coordinated Fe3+ is reported. When used as a positive intercalation electrode in a lithium cell, it can store charge of up to 120 mAhg(-1) at a rate of 100 mAg(-1). However, it converts to the defect spinel LiFe5O8 on cycling. By combining results from powder X-ray diffraction, differential electrochemical mass spectrometry, electrochemical cycling, and TG-MS, it is shown that such conversion, which involved oxygen loss, is not associated with direct O2 gas evolution but instead reaction with the electrolyte. We suggest that intercalation/deintercalation is accompanied by the exchange of Li+ by H+ in the material and subsequent loss of H2O, thus converting LiFeO2 to the defect spinel LiFe5O8 on cycling.