Electrochemical performance of lithium ion batteries is associated with structural and chemical stability of electrode materials. In the case of nickel-rich layered cathode materials LiNi0.6Co0.2Mn0.2O2, cation mixing, which results from the migration of transition metal ions into vacant lithium sites, is accelerated owing to similar ionic radii between nickel and lithium. However, the inevitable lattice distortions and chemical evolution have not been investigated intensely. In this paper, we report the structural evolution localized at surface regions through electron diffraction and high resolution imaging analyses with aberration-corrected transmission electron microscopy and scanning transmission electron microscopy. Repetition of volumetric change generates cracks and voids associated with deterioration of electrochemical performance. Structural change is related with (003) intensity in electron diffraction and it can be presented by dark field transmission electron microscopy imaging at a glance. Drastic structural degradation during early cycling shows relation with rapid capacity and voltage fade. Electron energy loss spectroscopy elucidates that the structural evolution caused by the migration of Ni ions accompanies chemical modification of Mn ions and creation of hole states at the O2p level. This study provides an insight into correlating structural and chemical evolution with degradation mechanism on battery performances of LiNi0.6Co0.2Mn0.2O2 cathode materials. Display omitted •Simulation and experiment for electron diffraction confirm the structural degradation.•Atomic resolution TEM/STEM imaging analyses represent structural degradation clearly.•The structural collapse is related with capacity fade during early cycling.•Migration of Ni ions to vacant Li sites changes the oxidation states of Mn.