The transition metals in ternary oxide cathode materials for lithium-ion batteries inevitably exchange with protons in LiPF6-containing electrolytes to be dissolved, leading to loss of the active material and rapid capacity fading. Here, a chemically inert Nd2O3 interlayer is employed to avoid the direct contact of the active material (LiNi0.8Co0.1Mn0.1O2) and electrolyte. As a result, Nd2O3-coated LiNi0.8Co0.1Mn0.1O2 (NCM811) shows improved cycle performances with a capacity retention of 88.0% after 100 cycles over 3.0–4.4 V, 9.3% higher than the retention of the bare NCM811. Even at an elevated temperature, Nd2O3-coated NCM811 exhibits better cycle performance as well. The superior electrochemical performances for Nd2O3-coated NCM811 are ascribed to that Nd2O3 encapsulation-assisted surface passivation alleviates the undesirable interface side reactions and transition metal dissolution (TMD). These features suggest the promising potential of chemically inert Nd2O3 as a long-acting surface modifier in passivating electrolyte/electrode interface.