Abstract Aqueous lithium‐ion batteries (ALIBs) are attracting significant attention as promising candidates for safe and sustainable energy storage systems. This paper delves into the crucial aspects of ALIB technology focusing on the interaction between LiCoO 2 (lithium cobalt oxide) cathode material and water electrolytes, with a specific emphasis on the Oxygen Evolution Reaction (OER) process. Fundamental understanding of the electrochemical behavior of LiCoO 2 in aqueous electrolytes is crucial for enhancing the performance, safety, and longevity of ALIBs using LiCoO 2 as the cathode material. Through a comprehensive periodic density functional analysis of the LiCoO 2 ‐water at the cathode interface, the potential catalytic contributions to the OER mechanism of LiCoO 2 are explored. The catalytic properties of LiCoO 2 towards OER are investigated considering different steady states of the lowest energy surfaces of LiCoO 2 and three different Li concentrations. Our results do not predict the formation of oxygen gas due to the expected large overpotentials, although the exergonic water decomposition to hydroxyl by means the first proton‐electron transfer is predicted at equilibrium potential. This work contributes to the fundamental understanding of LiCoO 2 as cathode for aqueous lithium‐ion batteries, reporting the pros and cons of one of the most common cathode materials for traditional non‐aqueous batteries.