Nitrates of lithium, cobalt and nickel are utilized to synthesize LiNi0.8Co0.2O2 cathode material through sol–gel technique. Various synthesis parameters such as calcination time and temperature as well as chelating agent are studied to determine the optimized condition for material processing. Using TG/DTA techniques, the optimized calcination temperatures are selected. Different characterization techniques such as ICP, XRD and TEM are employed to characterize the chemical composition, crystal structure, size and morphology of the powders. Micron and nano-sized powders are produced using citric/oxalic and TEA as chelating agent, respectively. Selected powders are used as cathode material to assemble batteries. Charge–discharge testing of these batteries show that the highest discharge capacity is 173mAhg−1 at a constant current of 0.1mAcm−2, between 3.0 and 4.2V. This is obtained in a battery assembled with the nanopowder produced by TEA as chelating agent.