CoO/Ni composite particles were prepared by the advanced mechanical-coating method railed Mechanofusion(TM). These composite particles were composed of nickel particles uniformly covered with fine CoO particles. A new cathode structure for molten carbonate fuel cells (MCFCs), where the NiO core was coated with an outer layer of lithiated cobalt and nickel solid-solution oxide (Li(Co,Ni) oxide), was formed by oxidation and lithiation using these CoO/Ni composite particles. The solubility of nickel in this Li(Co,Ni) oxide layer into carbonate melt decreased to two-thirds of that of NiO when used as a cathode for MCFCs.