The Li-rich rocksalt oxides Li2MO3 (M = 3d/4d/5d transition metal) are promising positive-electrode materials for Li-ion batteries, displaying capacities exceeding 300 mAh g–1 thanks to the participation of the oxygen non-bonding O(2p) orbitals in the redox process. Understanding the oxygen redox limitations and the role of the O/M ratio is therefore crucial for the rational design of materials with improved electrochemical performances. Here we push oxygen redox to its limits with the discovery of a Li3IrO4 compound (O/M = 4) that can reversibly take up and release 3.5 electrons per Ir and possesses the highest capacity ever reported for any positive insertion electrode. By quantitatively monitoring the oxidation process, we demonstrate the material’s instability against O2 release on removal of all Li. Our results show that the O/M parameter delineates the boundary between the material’s maximum capacity and its stability, hence providing valuable insights for further development of high-capacity materials.