Transmission electron microscopy (TEM) studies were carried out to elucidate cyclic deterioration phenomena for Li-rich layered cathode material Li[Ni0.17Li0.2Co0.07Mn0.56]O2. The results obtained show that the deterioration starts during the initial charge/discharge to higher potential over 4.5V, and leads to the formation of micro-cracks at the crystal surface and the distortion of crystal periodicity. These two kinds of defects lead to further non-crystallization of the crystal surface and the emergence of a very small amount of another possible phase. Our stepwise pre-cycling treatment effectively depressed the formation of the former two kinds of defects, and could significantly improve cyclic durability. The observation of non-crystallization at the cathode crystal surface, which would diminish the battery performance, is consistent with our preliminary ac impedance results.