Iron was substituted for Ni in LiNi0.8Co0.2O2 in order to enhance its electrochemical properties such as cycle life and rate capability. LiNi0.8−x Fe x Co0.2O2 (0≤x≤0.1) was synthesized in flowing oxygen for 12–48h at 650–800°C, and its structural and electrochemical properties were characterized with X-ray diffraction (XRD), cyclic voltammetry (CV) and charge–discharge tests. The XRD patterns of LiNi0.8−x Fe x Co0.2O2 showed that the α-NaFeO2 type layered structure was maintained up to x=0.1. As Fe was substituted for Ni up to x=0.05, the rate capability of LiNi0.8−x Fe x Co0.2O2 was improved. LiNi0.75Fe0.05Co0.2O2 showed better cycle stability than LiNi0.8Co0.2O2. XRD measurements indicated that the lattice of LiNi0.75Fe0.05Co0.2O2 expanded less than that of LiNi0.8Co0.2O2 when the lithium was de-intercalated. CV curves of LiNi0.8−x Fe x Co0.2O2 showed current peaks, which are related to the phase transitions, diminished with Fe substitution during charging and discharging owing to the decrease of Ni3+. Consequently, the improved cycle stability of LiNi0.75Fe0.05Co0.2O2 may be attributed to the decrease of phase transition.