Lithium-rich layered oxide cathodes have an advantage of high energy density. However, continuous capacity fading and voltage hysteresis have largely restricted their practical application. In this work, we investigated in depth the voltage-fading mechanism of Li-rich materials by in situ Raman spectroscopy, X-ray absorption near edge structure (XANES) spectroscopy, and high-resolution transmission electron microscopy (HRTEM). It has been found that the chemical and structural evolution of a Li1.2Ni0.15Co0.1Mn0.55O2 cathode is quasi-reversible in a whole charge-discharge cycle. The structural evolution is evidently irreversible upon long-term cycling, resulting in the dissolution of cations from the lattices and structural collapse, which in turn leads to undesirable voltage fading. This finding is important for a better understanding of the redox reaction mechanisms of high-capacity Li-rich cathodes.