While sodium-ion batteries (SIBs) hold great promise for large-scale electric energy storage and low speed electric vehicles, the poor capacity retention of the cathode is one of the bottlenecks in the development of SIBs. Following a strategy of using lithium doping in the transition-metal layer to stabilize the desodiated structure, we have designed and successfully synthesized a novel layered oxide cathode P2-Na0.66Li0.18Fe0.12Mn0.7O2, which demonstrated a high capacity of 190 mAh g-1 and a remarkably high capacity retention of ∼87% after 80 cycles within a wide voltage range of 1.5-4.5 V. The outstanding stability is attributed to the reversible migration of lithium during cycling and the elimination of the detrimental P2-O2 phase transition, revealed by ex situ and in situ X-ray diffraction and solid-state nuclear magnetic resonance spectroscopy.