In the present study, local structural changes in 0.4Li2MnO3–0.6LiMn1/3Ni1/3Co1/3O2, a kind of the layered solid solution, were investigated during initial discharging, in order to clarify the formation mechanism for the stable reversible phase. A pair distribution function (PDF) analysis was carried out using synchrotron X-ray total scattering data. The results indicated that rearrangement of Mn and Co took place from 3.3 to 4.6V during the first discharge process. The results suggest that the formation of a stable reversible phase took place around 3.3V during this process. Fitting to the extended X-ray absorption fine structure at the absorption edges further confirmed the PDF results. The stable reversible phase was then used to examine the origin of the irreversible capacity generated during the first cycles. It was found that a structure is initially formed that can incorporate only about 70% of the Li associated with first charge capacity. However, at around 3.3V during the first discharge process, a new structure that can incorporate about 83% of the Li is formed.