Li-rich layered oxide (LLO) is one of the most promising cathode materials for high energy–density lithium ion battery (LIB) due to its capacity more than 250 mAh g−1. However, the low initial Coulombic efficiency, large voltage decay and poor cycling stability caused by irreversible lattice oxygen releasing hinder its further development. The present work demonstrates that a surface layer of spinel Li4Mn5O12 rich of interface oxygen vacancies in LLO (denote as SLLO) reduces the voltage decay and suppresses the irreversible release of oxygen. When SLLO was used as a cathode in LIBs, the initial Coulombic efficiency is improved from 83% to 97%, a high reversible capacity of 303 mAh g−1 at a rate of 0.1C, as well as a capacity retention of 88% at 0.3C at 200 cycles, and corresponding voltage decay is also mitigated. Characterization and calculation reveal that the enhanced performance is attributed to the rapid Li+ extraction/insertion in the surface spinel; the irreversible release of O2 is reduced through the interfacial oxygen vacancies; the adverse reaction is largely suppressed by spinel coating layer.