LiNi0.8Co0.2O2 cathode powders for lithium-ion batteries were prepared by a modified sol–gel method with citric acid as chelating agent and a small amount of hydroxypropyl cellulose as dispersant agent. The structure and morphology of LiNi0.8Co0.2O2 powders calcined at various temperatures for 4 h in air were characterized by means of powder X-ray diffraction analyzer, scanning electron microscope, thermogravimetric analyzer and differential thermal analyzer, and Brunauer–Emmett–Teller specific surface area analyzer. The results show that LiNi0.8Co0.2O2 powders calcined at 800 °C exhibit the best layered structure ordering and appear to have monodispersed particulates surface. In addition, the electrochemical properties of LiNi0.8Co0.2O2 powders as cathode material were investigated by the charge–discharge and cyclic voltammetry studies in a three-electrode test cell. The initial charge–discharge studies indicate that LiNi0.8Co0.2O2 cathode material obtained from the powders calcined at 800 °C shows the largest charge capacity of 231 mAh g−1 and the largest discharge capacity of 191 mAh g−1. And, the cyclic voltammetry studies indicate that Li+ insertion and extraction in LiNi0.8Co0.2O2 powders is reversible except for the first cycle.