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.