Abstract: Layered Li(M,Li)O2 (where M is a transition metal) ordered rock-salt-type structures are used in advanced metal-ion batteries as one of the best hosts for the reversible intercalation of Li ions. Besides the conventional redox reaction involving oxidation/reduction of the M cation upon Li extraction/insertion, creating oxygen-located holes because of the partial oxygen oxidation increases capacity while maintaining the oxidized oxygen species in the lattice through high covalency of the M–O bonding. Typical degradation mechanism of the Li(M,Li)O2 electrodes involves partially irreversible M cation migration toward the Li positions, resulting in gradual capacity/voltage fade. Here, using LiRhO2 as a model system (isostructural and isoelectronic to LiCoO2), for the first time, we demonstrate an intimate coupling between the oxygen redox and M cation migration. A formation of the oxidized oxygen species upon electrochemical Li extraction coincides with transformation of the layered Li1–xRhO2 structure into the γ-MnO2-type rutile–ramsdellite intergrowth LiyRh3O6 structure with rutile-like [1 × 1] channels along with bigger ramsdellite-like [2 × 1] tunnels through massive and concerted Rh migration toward the empty positions in the Li layers. The oxidized oxygen dimers with the O–O distances as short as 2.26 Å are stabilized in this structure via the local Rh–O configuration reminiscent to that in the μ-peroxo-μ-hydroxo Rh complexes. The LiyRh3O6 structure is remarkably stable upon electrochemical cycling illustrating that proper structural implementation of the oxidized oxygen species can open a pathway toward deliberate employment of the anion redox chemistry in high-capacity/high-voltage positive electrodes for metal-ion batteries. Upon chemical or electrochemical oxidation, layered LiRhO2 shows a unique structural transformation that involves both cation migration and oxidation of oxygen resulting in a stable tunnel-like rutile−ramsdellite intergrowth LiyRh3O6 structure. This structure demonstrates excellent performance with the steady and reversible capacity of ∼200 mAh/g. The stability of LiyRh3O6 is rooted in the accommodation of partially oxidized oxygen species through the formation of short O−O distances that are compatible with the connectivity of RhO6 octahedra.