Ab initio calculations suggest that partially lithiated layered LixMnO2 transforms to spinel in a two-stage process. In the first stage, a significant fraction of the Mn and Li ions rapidly occupy tetrahedral sites, forming a metastable intermediate. The second stage involves a more difficult coordinated rearrangement of Mn and Li ions to form spinel. This behavior is contrasted to LixCoO2. The susceptibility of Mn for migration into the Li layer is found to be controlled by oxidation state, which suggests various means of inhibiting the transformation. These strategies could prove useful in the creation of superior Mn-based cathode materials.