Layered Ni-rich oxides have attracted much attention for the positive electrode in lithium-ion batteries due to their low cost and high capacity. However, they still suffer from poor cycling and rate performance, especially at high voltage. In this work, LiNi0.6Co0.2Mn0.2O2 powders are surface-modified by a Li2ZrO3 coating prepared under either dry air or oxygen. The effect of the coating atmosphere on the electrochemical properties of Li2ZrO3/LiNi0.6Co0.2Mn0.2O2 are systematically investigated by multiple structural characterization (synchrotron HRXRD, SEM, TEM, and XPS) and electroanalytical (EIS, SSCV, and GITT) techniques. The Li2ZrO3 coating prepared in oxygen is largely amorphous. It not only provides surface protection against the electrolyte corrosion but also enables faster lithium-ion transport at the interfacial regions. Additionally, oxygen atmosphere facilitates Zr diffusion from the surface coating to the bulk of LiNi0.6Co0.2Mn0.2O2, which stabilizes the crystal structure and enhances lithium-ion diffusion. Consequently, LiNi0.6Co0.2Mn0.2O2 cathodes coated with Li2ZrO3 in oxygen exhibit improved high-voltage cycling stability and high-rate performance.