We have applied in situ X-ray absorption fine structure (XAFS) and in situ micro-XAFS techniques to study LiNi0.8Co0.15Al0.05O2 cathode materials in Li-ion coin cells that show various levels of capacity fading: fresh cell, cycle tested cell and aging tested cell. The change in the oxidation state and local structure of Ni and Co during charge has been investigated. Ni and Co K-edge X-ray absorption near edge structure (XANES) show that the Ni oxidation state is converted from Ni3+ to Ni4+ upon charging, whereas the Co oxidation state hardly changes. Ni K-edge extended X-ray absorption fine structure (EXAFS) reveals that the Jahn–Teller distorted NiO6 octahedron turns into the symmetric octahedron upon charging, which is consistent with the change in the Ni oxidation state. Ni K-edge micro-XANES show that the oxidation of Ni proceeds homogeneously in a grain of LiNi0.8Co0.15Al0.05O2 within the special resolution of ∼2μm, and proceeds independently of the grain size. All the behaviors of Ni and Co observed in these experiments for the fresh cell remain unchanged after the capacity fade is induced by cycle tests or aging tests, which demonstrates the considerable stability of the LiNi0.8Co0.15Al0.05O2 cathode material.