Fine powders of Li1+xMn2-xO4 cathode materials were synthesized by a nitrate route based on the Lux-Flood principle. The method involves the reaction of MnSO4.H2O with an excess of nitrate from a nitrate bath. The reaction consists of three steps, dehydration, oxidation, and lithiation. Cathode powders with a grain size of similar to 100 nm were made and tested in rechargeable lithium batteries fur their capacity retention and high discharge current behavior Despite the small diffusion path offered by these nanosized grains during lithium insertion, the electrochemical performance of the cathode was not improved. The observed discharge profiles are interpreted in terms of current density-dependent mixed insertion into tetrahedral and octahedral sites. A quantitative analysis of the capacity retention data for Li-substituted Li1+xMn2-xO4 and stoichiometric LiMn2O4 cathodes suggests that Li1+xMn2-xO4 is immune to dissolution in the electrolyte. These results are interpreted as establishing that the dissolution of the cathode and the structural fatigue induced by the Jahn-Teller distortion are correlated through the formation of Li2Mn2O4 at the grain surface.