LiNi0.5Mn0.5O2 was heat-treated under high oxygen-pressure and Ar-reducing conditions, and then the cathode properties, thermodynamic stability and average and local structures were investigated. From X-ray diffraction and ICP measurements, it was found that the pristine LiNi0.5Mn0.5O2 had a single phase of the layered rock-salt structure although the Ni content was slightly rich compared with the nominal one. These characteristics were kept even after the heat-treatments. Charge–discharge cycle tests clarified that the cycle performance of LiNi0.5Mn0.5O2 was improved by both the reducing and oxidizing treatments. From neutron diffraction and X-ray absorption fine structure measurements, the local distortion around the transition metal, especially Ni, was supposed to be one of the important factors to determine the cathode properties. It was also found that the sample with higher thermodynamic stability exhibited better capacity retention in the discharge–charge cycle tests.