The compound, Li(Ni1/2Mn1/2)O2 was prepared by the mixed hydroxide method at 950°C in air. It was coated with 3 and 6wt.% NiO by the solution method and heat treated at 450°C in air. The compounds were characterized by X-ray diffraction, SEM, TEM, BET surface area and density. Cyclic voltammmetry of the bare and NiO-coated compounds showed redox processes at 3.69–3.95V corresponding to the couple Ni2+/3+/4+. Galvanostatic charge–discharge cycling was carried out at 30mAg−1 up to 70 cycles in the voltage ranges, 2.5–4.3 and 2.5–4.5V versus Li at room temperature. The 10th cycle discharge capacities for the bare and NiO-coated compounds are 140±3mAhg−1 which are stable up to 20–30 cycles after which capacity-fading occurs. The 6% NiO-coated compound performs better with only 11% capacity loss at the 70th cycle. In the range 2.5–4.5V, the third cycle capacities are 175±5mAhg−1 for the bare and 3% NiO-coated compounds, but capacity-fading starts from fifth cycle onwards. The 6% NiO-coated Li(Ni1/2Mn1/2)O2 showed a stable discharge capacity of 165±3mAhg−1 during 3–30 cycles after which it degraded, by ∼9%, at the 70th cycle. Thus, NiO-coating suppresses capacity-fading but not eliminates it in Li(Ni1/2Mn1/2)O2. The coulombic efficiency in all cases was >98%. DSC on the cathodes in the charged-state (4.3V) show that the exothermic decomposition for the bare and 6% NiO-compound occurs at 300 and 307 (±2)°C, respectively.