The Li-rich, Mn-rich (LMR) layered structure materials exhibit very high discharge capacities exceeding 250 mAh g(-1) and are very promising cathodes to be used in lithium ion batteries. However, significant barriers, such as voltage fade and low rate capability, still need to be overcome before the practical applications of these materials. A detailed study of the voltage/capacity fading mechanism will be beneficial for further tailoring the electrode structure and thus improving the electrochemical performances of these layered cathodes. Here, we report detailed studies of structural changes of LMR layered cathode Li[Li0.2Ni0.2Mn0.6]O2 after long-term cycling by aberration-corrected scanning transmission electron microscopy (STEM) and electron energy loss spectroscopy (EELS). The fundamental findings provide new insights into capacity/voltage fading mechanism of Li[Li0.2Ni0.2Mn0.6]O2. Sponge-like structure and fragmented pieces were found on the surface of cathode after extended cycling. Formation of Mn(2+) species and reduced Li content in the fragments leads to the significant capacity loss during cycling. These results also imply the functional mechanism of surface coatings, for example, AlF3, which can protect the electrode from etching by acidic species in the electrolyte, suppress cathode corrosion/fragmentation, and thus improve long-term cycling stability.