Abstract: High-energy lithium-rich layered transition metal oxides are capable of delivering record electrochemical capacity and energy density as positive electrodes for Li-ion batteries. Their electrochemical behavior is extremely complex due to sophisticated interplay between crystal structure, electronic structure, and defect structure. Here we unravel an extra level of this complexity by revealing that the most typical representative Li1.2Ni0.13Mn0.54Co0.13O2 material, prepared by a conventional coprecipitation technique with Na2CO3 as a precipitating agent, contains abundant coherent (001) grain boundaries with a Na-enriched P2-structured block due to segregation of the residual sodium traces. The trigonal prismatic oxygen coordination of Na triggers multiple nanoscale twinning, giving rise to incoherent (104) boundaries. The cationic layers at the (001) grain boundaries are filled with transition metal cations being Mn-depleted and Co-enriched; this makes them virtually not permeable for the Li+ cations, and therefore they negatively influence the Li diffusion in and out of the spherical agglomerates. These results demonstrate that besides the mechanisms intrinsic to the crystal and electronic structure of Li-rich cathodes, their rate capability might also be depreciated by peculiar microstructural aspects. Dedicated engineering of grain boundaries opens a way for improving inherently sluggish kinetics of these materials.