Potassium-ion batteries are widely being pursued as potential candidates for stationary (grid) storage, where energy dense K+ insertion cathodes are central to economic and energy efficient operation. To develop robust K-based cathodes, it is key to correlate their underlying electronic states to the final electrochemical performance. Here, we report the synthesis and structure-electrochemical property correlation in P3-type K0.5Mn1-xCoxO2 binary layered oxide cathodes. Spectroscopic analyses revealed a random distribution of Mn and Co in transition metal layers in the oxygen anion framework. In this solid-solution family, Co substitution improved the electronic conductivity and structural stability of P3 phases by minimizing local lattice distortion. Co substitution led to a systematic shift of the Co4+/Co3+ and Mn4+/Mn3+ redox potentials. Galvanostatic cycling showed that the Co substitution reduced the initial capacity while improving the cycling stability. The role of Co on final electrochemical properties of P3-layered oxides has been elucidated as a design tool to develop practical potassium-ion batteries.