A Ni-rich material (LiNi0.88Co0.09Mn0.03O2) was used as a cathode for Li-ion full cells to investigate the capacity fading behavior when the Ni content in the layered oxide cathode is very high. The morphology and compressive strength of the cathodes were analyzed after 1, 100, 200, and 300 full-cell cycles. A comparison of the results with those obtained for the LiNi0.8Co0.1Mn0.1O2 cathode revealed that the increased Ni content leads to further mechanical deterioration of the material upon cycling. The lattice parameter variation of the LiNi0.88Co0.09Mn0.03O2 electrode during cycling was measured using in situ X-ray diffraction analysis; the results showed that the variation of the lattice parameter of the LiNi0.88Co0.09Mn0.03O2 electrode was higher than that of the LiNi0.8Co0.1Mn0.1O2 electrode. The LiNi0.88Co0.09Mn0.03O2 electrode has a high specific capacity, indicating that more Li can be extracted from the electrode, which leads to the increased changes in the lattice parameter. Consequently, the high-Ni-containing electrode exhibits degraded mechanical and surface stabilities, as evidenced by observation of microcracks, a decrease in compressive strength of secondary particles, and increased internal pressure of the cells. Therefore, the mechanical and surface stability issues should be carefully considered when Ni-rich layered oxide cathode materials are used in Li-ion full cells.