The poor cycling stability of Li- and Mn-rich layered oxide cathodes used in lithium-ion batteries (LIBs) has severely limited their practical application. Unfortunately, current strategies to improve their lifecycle sacrifice initial capacity. In this paper, we firstly report the synergistic improvement of the electrochemical performance of a Li1.2Ni0.13Co0.13Mn0.54O2 (LNCMO) cathode material, including gains for capacity, cycling stability, and rate capability, by the partial substitution of Li+ ions by Mg2+ ions. Electrochemical performance is evaluated by a galvanostatic charge and discharge test and electrochemical impedance spectroscopy (EIS). Structure and morphology are characterized by X-ray diffraction (XRD) and high-resolution transmission electron microscopy (HRTEM). Compared with the substitution of transition metal (TM) ions with Mg2+ ions reported previously, the substitution of Li+ ions by Mg2+ ions not only drastically ameliorates the capacity retention and rate performance challenges of LNCMO cathodes but also markedly suppresses their voltage fading, due to the inhibition of the migration of TM ions during cycling, while also increasing the capacity of the cathode due to an increased abundance of the Li2MO3 phase.