The surfaces of LiCoO2 particles were modified to improve the charge-discharge cycling properties of Li-ion batteries containing LiCoO2 cathodes. The sol-gel technique was used to modify the surface of LiCoO2 particles with magnesium oxide. Capacity retention during cycling of the magnesium oxide-coated LiCoO2 cathode was superior to that of a cathode comprising pristine LiCoO2. Moreover, results obtained from TEM measurements indicate that the Li concentration was relatively homogeneous in the magnesium oxide-coated LiCoO2 particles after cycling tests. The crystallographic planes of the coating were found to be coherently oriented with those of the substrate, MgO(111)[1−10]//LiCoO2(003)[100]. Therefore, we believe that a thin cover of Mg on the surface of LiCoO2 stabilizes the surface, contributing to the homogeneity of charge and discharge reactions.