The synthesis and electrochemical characteristics of LiNiO2 and Li(Ni . M)O-2 (M = Co or Mn) as the cathode materials for rechargeable lithium batteries were investigated. It was clarified from these investigations that LiNiO2 has been produced from crystalline NiO, which was derived from Ni(OH)(2) and LiOH, and that the property of NiO had some influence on the LiNiO2 preparation. It was assumed that the formation of the layered structure has been inhibited by the existence of the Ni vacancy and Ni3+ ion in NiO. The synthesis of a solid solution of Li(Ni . Co)O-2 suggested that a part of the Ni replacement by Co might inhibit the formation of the Ni vacancy of NiO and promote the formation of the layered structure. The capacity fading with increase in cycle number was suppressed by the replacement of a part of Ni with Co. We considered that the capacity fading was suppressed by the development of the layered structure wherein formation of Ni vacancy was suppressed by replacement with Co. LiNi0.8Co0.2O2 prepared under the stream of oxygen gas showed a small irreversible capacity at first cycle and higher cycling capacity of similar to 180 mA h g(-1).