Commercial cathode material LiCoO2 was modified by coating its surface with a thin layer of amorphous magnesium oxide (MgO). The surface morphology, crystalline structure, and electrochemical performance of the modified cathode material were characterized and compared with that of pristine LiCoO2. It is found that surface modification can improve the structural stability of LiCoO2 without decreasing its available specific capacity. Specific capacities of 145, 175, and 210 mAh/g were obtained in test cells composed of MgO-coated LiCoO2 cathode material when charged to 4.3, 4.5, and 4.7 V (Li+/Li), respectively. This improvement is attributed to the pillaring effect of the Mg2+ ions in the interslab space of the lattice and the protective effect of the MgO film against the escape of Co4+ ions from the bulk of LiCoO2 particles.