Safety concerns in high-performance lithium rechargeable batteries are one of the major technical barriers that have to be overcome for successful commercialization of more demanding applications like electric vehicles and electric energy storage for renewable energy sources. The thermal stability of the charged cathode materials is critical in the safety characteristics of Li batteries, which is related to the occurrence of exothermic reactions in charged batteries at elevated temperatures that ultimately result in thermal runaway and catastrophic failure of the battery. The thermal runaway has been attributed to the reactions between the charged electrodes and the electrolyte. Therefore, in-depth understanding of the structural changes of the charged cathode material during thermal decomposition reactions, with or without the presence of electrolytes and their relationship with the thermal stability of the cathode material is very important. One of the effective ways to improve the thermal stability of charged cathodes is to modify the electrode materials’ surface by coating with stable metal oxides. Here we report the effect of surface modification on the structural changes and their relationship with thermal stability of charged MgO-coated LiNi0.8Co0.2O2 cathodes by using in situ XRD technique in a wide temperature range from 25°C to 450°C with and without the presence of electrolyte in comparison with bare LiNi0.8Co0.2O2 cathodes.