Inferior cycling stability, poor safety, and gas generation are long lasting problems of Ni-rich LiNi0.80Co0.10Mn0.10O2 (NCM811) cathode material. Although much effort has been made, mechanisms for the above problems are poorly understood. Studying the cycling and float-charging characteristics of Li/NCM811 cells in high voltage conditions (4.5 V and 4.7 V, respectively), in this work we find that nearly all known problems with NCM811 material can be attributed to the oxidation of lattice oxygen occurring in the capacity region corresponding to H2 → H3 phase transition. While contributing to overall capacity, the oxidation of lattice oxygen results in a loss of oxygen through oxygen evolution and relative reactions between active oxygen evolution intermediates and electrolyte solvents. It is the loss of oxygen that results in irreversible layered-spinel-rocksalt phase transition, secondary particle cracking, and performance degradation. The conclusions of this work suggest that the priority for further research on NCM811 material should give to the suppression of oxygen evolution, followed by the use of the anti-oxygen electrolyte being chemically stable against the active oxygen evolution intermediates.