In this study, the mechanism of enhanced performance of ZrO2-coated LiCoO2 especially at high potential range is systematically investigated. Firstly, when overcharging to 4.5V (higher than 4.2V, the normal cutoff charging potential), phase transformation from H1 to H2 takes place with less volume expansion for ZrO2-coated LiCoO2 (1.2% and 2.2% for as-received one). EIS analysis indicates the growth of interfacial impedance during charging/discharging can be effectively suppressed with ZrO2 coating on the LiCoO2 surface. It is demonstrated as well that cation mixing of the cycled LiCoO2 caused by re-intercalation of dissolved Co2+ is inhibited with the ZrO2 coating on the LiCoO2. Therefore the ZrO2-coated LiCoO2 shows great enhancement in the electrochemical properties with 85% capacity retention after 30 cycles from 3 to 4.5V at a rate of 0.5C. Nevertheless, under the same evaluation process, the as-received LiCoO2 possesses only 21% capacity retention, which is resulted from the formation of polymeric layers by the electrolyte decomposition on its surface, the higher volumetric changes during charging/discharging and possible cation mixing by re-intercalation of the dissolved Co2+.