A novel electrolyte additive, dimethyl phenylphosphonite (DMPP), is reported in this paper to be able to improve significantly the cyclic stability of LiNi0.5Mn1.5O4 cathode of high voltage lithium ion battery at elevated temperature. When experiencing charge/discharge cycling at 50 °C with 1C (1C = 146.7 mAh g−1) rate in a standard (STD) electrolyte (1.0 M LiPF6 in ethylene carbonate (EC)/dimethyl carbonate (DMC), EC/DMC = 1/2 in volume), LiNi0.5Mn1.5O4 suffers serious discharge capacity decaying, with a capacity retention of 42% after 100 cycles. With adding 0.5% DMPP into the STD electrolyte, the capacity retention is increased to 91%. This improvement can be ascribed to the preferential oxidation of DMPP to the STD electrolyte and the subsequent formation of a protective film on LiNi0.5Mn1.5O4, which suppresses the electrolyte decomposition and protects LiNi0.5Mn1.5O4 from destruction. Theoretical calculations together with voltammetric analyses demonstrate the preferential oxidation of DMPP and the consequent suppression of electrolyte decomposition, while the observations from scanning electron microscopy, X-ray photoelectronic spectroscopy and Fourier transform infrared spectroscopy confirm the protection that DMPP provides for LiNi0.5Mn1.5O4.