Lithium oxide (Li2O) is activated in the presence of a layered composite cathode material (HEM) significantly increasing the energy density of lithium-ion batteries. The degree of activation depends on the current rate, electrolyte salt, and anode type. In full-cell tests, the Li2O was used as a lithium source to counter the first-cycle irreversibility of high-capacity composite alloy anodes. When Li2O is mixed with HEM to serve as a cathode, the electrochemical performance was improved in a full cell having an SiO-SnCoC composite as an anode. The mechanism behind the Li2O activation could also explain the first charge plateau and the abnormal high capacity associated with these high energy cathode materials.