Abstract High‐voltage LiCoO 2 delivers a high capacity but sharp fading is a critical issue, and the capacity decay mechanism is also poorly understood. Herein, we clarify that the escape of surface oxygen and Li‐insulator Co 3 O 4 formation are the main causes for the capacity fading of 4.6 V LiCoO 2 . We propose the inhibition of the oxygen escape for achieving stable 4.6 V LiCoO 2 by tailoring the Co3d and O2p band center and enlarging their band gap with MgF 2 doping. This enhances the ionicity of the Co−O bond and the redox activity of Co and improves cation migration reversibility. The inhibition of oxygen escape suppresses the formation of Li‐insulator Co 3 O 4 and maintains the surface structure integrity. Mg acts as a pillar, providing a stable and enlarged channel for fast Li + intercalation/extraction. The modulated LiCoO 2 shows almost zero strain and achieves a record capacity retention at 4.6 V: 92 % after 100 cycles at 1C and 86.4 % after 1000 cycles at 5C.