In the present work, we have optimized the process parameters to synthesize nano-crystalline lithium manganate (LMO) thin films with dense surface morphology and uniform grain size distribution by a solution growth technique. These films were characterized in terms of their phase formation, surface morphology, charge–discharge capacity, rate capability, and cycleability. The films exhibited excellent discharge capacity (close to the theoretical capacity of LMO) and rate capability in a wide range of discharge current densities. However, the rapid capacity fading was observed within the first few initial charge–discharge cycles and with progressive cycling marginal capacity fading was observed. To understand these phenomena, we have investigated the kinetics of Li ion diffusion in these thin film electrodes by cyclic voltammetry (CV) as well as potential step chronoamperometry (PSCA) measurements. In case of the cycled thin film electrode, the Li ion diffusion coefficient was reduced to almost one order of magnitude as compared to its virgin counterpart. During the charge–discharge cycling of these thin film electrodes in a liquid electrolyte, a surface electrolyte interface (SEI) layer was formed on the thin film electrode. It has been argued that the formation of such layer would reduce the Li ion diffusion coefficient and led to the observed capacity fading.