Layered LiNiO2 cathode has been considered as an applicable cathode candidate for high energy density and low-cost lithium-ion batteries. However, unsatisfactory cyclability and rate capability impede its large-scale applications. We report here nano-ZrO2 modified LiNi0·92Co0·08O2 cathode, designing to provide an effective and practical strategy for solving the thorny problems. Combination of Li2ZrO3 coating layer with concentration gradient of Zr4+ doping on LiNi0·92Co0·08O2 cathode is achieved through addition of moderate nano-ZrO2 during two-stage sintering process. It is found that the LiNi0·92Co0·08O2–Zr2.0% cathode exhibits optimal electrochenmical performance with an initial discharge capacity of 200.3 mAh g−1 at 0.5 C within the voltage window of 2.8–4.3 V and a capacity retention ratio of 82.90% is obtained after 100 cycles. In contrast, LiNi0·92Co0·08O2 cathode delivers a higher initial capacity of 204.4 mAh g−1, but only a capacity of 59.01% is retained. Speciallly, a discharge capacity of 175.7 mAh g−1 (&164.3 mAh g−1) at 5 C (&10 C) rate confirms excellent rate capability of LiNi0·92Co0·08O2–Zr2.0% cathode. Feasible industrialization of bifunctional modification by nano-ZrO2 provides an effective solution for rapid capacity decay issue of nickel-rich layered oxide cathodes.