Ni0.7Ni1/6Mn5/6]O-2 powders have been prepared by ion exchange of Li for Na in Na-2/3[Li1/6Mn5/6]O-2 precursor synthesized by a sol-gel method using glycolic acid as a chelating agent. The material delivers 180 mAh/g and shows excellent cyclability, retaining 98% (0.0486 mAh/g . cycle) of the initial capacity after 50 cycles. The electrochemical behavior and structural transformation of Li-0.7[Ni1/6Mn5/6]O-2 electrode after cycling was investigated using X-ray diffraction, transmission electron microscopy (TEM), and cyclic voltammetry (CV). Both charge/discharge and CV curves indicate that the Li-0.7[Ni1/6Mn5/6]O-2 powder has a unique electrochemical property that differs from those of the layered or spinel Li-Mn-O phases. Close examination of the powder structure using TEM revealed that the as-prepared powder consists of a new type of defective spinel structure with a high density of planar faults along a particular crystallographic direction, which appears to be removed by the electrochemical cycling.