Thermal stability is one of the critical requirements for commercial operation of high energy lithium-ion batteries. In this study, we use in situ X-ray diffraction technique to elucidate the thermal degradation mechanism of 0.5Li2MnO3-0.5LiNi0.33Co0.33Mn0.33O2 lithium rich cathode material in the absence and presence of electrolyte to simulate the real life battery conditions and compare its thermal behavior with the commercial LiNi0.33Co0.33Mn0.33O2 cathode material. We show that the thermal induced phase transformations in delithiated lithium rich cathode material are much more intense compared to similar single phase layered cathode material in the presence of electrolyte. The structural changes in both cathode materials with the temperature rise follow different trends in the absence and presence of electrolyte between 25 and 600 °C. Phase transitions are comparatively simple in the absence of electrolyte, the fully charged lithium rich cathode material demonstrates better thermal stability by maintaining its phase till 379 °C, and afterwards spinel structure is formed. In the presence of electrolyte, however, the spinel structure appears at 207 °C, subsequently it transforms to rock salt type cubic phase at 425 °C with additional metallic, metal fluoride, and metal carbonate phases.