Comparative study has been carried out by Fourier transform infrared and X-ray photoelectron spectroscopy to understand the electrochemical performance improvement of nanometer-sized magnesium oxide (nano-MgO) modified commercial LiCoO2 (MgO/LiCoO2) cathode materials for lithium-ion batteries. It is found that the configuration of the solvent molecules of the electrolyte are very sensitive to the disturbance of nano-MgO and commercial LiCoO2. Modifying the surface of commercial LiCoO2 particles with nano-MgO can suppress such chemical reactions on the electrode surface significantly. In addition, by hindering the formation of oxygen with high oxidizing power and by physically separating the electrolyte from direct contact with the active cathode material, surface coating suppresses the interaction between LiCoO2 and the electrolyte at the uncharged state and alleviates the electrolyte decomposition at charged states. (C) 2003 The Electrochemical Society.