To find the origin of a large initial irreversible capacity and capacity fading with cycling for Fe-substituted LiCoO2 (LiCo1-yFeyO2), the LiCo0.8Fe0.2O2 positive electrode was selected for study by ex situ X-ray diffraction, Co and Fe K-edge X-ray absorption, and Fe-57 Mossbauer spectroscopies. A disordering of Fe ions from 3b(0, 0, 1/2) to 6c(0, 0, 3/8) sites was detected for initial charged samples through X-ray Rietveld analysis and Co and Fe K-edge X-ray absorption near-edge structures and extended X-ray fine structures spectra. The valence state of Fe ions in the 6c site was determined to be a 3+/4+ mixed valence state from the isomer shift values obtained by Fe-57 Mossbauer spectra and mean M-O distance values. 50% of the iron ions become disordered after the initial charge process and more than 20% remain in 6c sites after the first and tenth discharge processes. The existence of Fe3+delta (0 < δ < 1) ions on the interstitial 6c site can block fast Li conduction in the Li layer of the layered rock-salt structure (R (3) over barm). This leads to a lack of reversibility in Fe-substituted LiCoO2 positive electrode materials. (C) 2004 The Electrochemical Society.