Potassium ion batteries (PIBs) are emerging as potential next-generation energy storage systems on account of their low cost and high theoretical energy density. Nevertheless, they also face challenges of low specific capacity and suboptimal cycling stability. Herein, we synthesize a cocoon-like P3-type K0.5Mn0.7Ni0.3O2 (KMNO) cathode material by a self-template method. The KMNO cocoons possess a hierarchical layered architecture composed of nanoparticle stacking, which can accelerate the transport kinetics of potassium ions, mitigate the stress caused by K+ intercalation and deintercalation, and improve structural stability. In addition, Ni can not only alleviate the Jahn-Teller distortion and suppress the phase transition to stabilize the structure, but also act as an electrochemically active element, providing the capacity of two electrons from Ni2+ to Ni4+. Combining the advantages of structure and nickel substitution, the P3-type KMNO cocoons are used for electrochemical performance testing of PIB cathodes, delivering an excellent rate capability of 57.1 mA h g−1 at 500 mA g−1 and a remarkable cycling stability of 77.0% over 300 cycles at 100 mA g−1. Impressively, the KMNO cocoons//pitch-derived soft carbon assembled full battery exhibits superior electrochemical performance with a reversible capacity of 79.7 mA h g−1 at 50 mA g−1. Moreover, ex-situ XRD also further reveals a solid solution phase reaction with a volume change of only 1.46%. This work furnishes a suitable approach to fabricating high-performance layered oxide cathodes for PIBs with outstanding cycling stability and rate capability.