Most P2-type layered oxides suffer from multiple voltage plateaus, due to Na+/vacancy-order superstructures caused by strong interplay between Na-Na electrostatic interactions and charge ordering in the transition metal layers. Here, Mg ions are successfully introduced into Na sites in addition to the conventional transition metal sites in P2-type Na0.7[Mn0.6Ni0.4]O2 as new cathode materials for sodium-ion batteries. Mg ions in the Na layer serve as "pillars" to stabilize the layered structure, especially for high-voltage charging, meanwhile Mg ions in the transition metal layer can destroy charge ordering. More importantly, Mg ion occupation in both sodium and transition metal layers will be able to create "Na-O-Mg" and "Mg-O-Mg" configurations in layered structures, resulting in ionic O 2p character, which allocates these O 2p states on top of those interacting with transition metals in the O-valence band, thus promoting reversible oxygen redox. This innovative design contributes smooth voltage profiles and high structural stability. Na0.7Mg0.05[Mn0.6Ni0.2Mg0.15]O2 exhibits superior electrochemical performance, especially good capacity retention at high current rate under a high cutoff voltage (4.2 V). A new P2 phase is formed after charge, rather than an O2 phase for the unsubstituted material. Besides, multiple intermediate phases are observed during high-rate charging. Na-ion transport kinetics are mainly affected by elemental-related redox couples and structural reorganization. These findings will open new opportunities for designing and optimizing layer-structured cathodes for sodium-ion batteries.