This paper reports on a fundamental study of the Jahn-Teller distortion effect after lithium intercalation in transition metal oxides, using the density functional theory in the local spin density approximation. The intercalation of lithium in cobalt oxide was found to form a stable compound with an α-NaFeO2 crystal structure. An unstable structure was found to form for the nickel oxide compound. An important Jahn-Teller distortion was observed in MnO2 and LiMnO2, and the structure was found to be unstable. These theoretical results are in agreement with the experimental findings in the literature. © 2005 Elsevier B.V. All rights reserved.