Potassium-ion batteries (PIBs) are one of the promising alternatives to lithium-ion batteries (LIBs). Layered potassium manganese oxides are more attractive as cathodes for PIBs due to their high capacity, low cost, and simple synthesis method but suffer from the Jahn–Teller effect of Mn3+ in material synthesis. Here, a layered P3-type K0.67Mn0.83Ni0.17O2 material with a suppressed Jahn–Teller effect was successfully synthesized. K0.67Mn0.83Ni0.17O2 delivers a specific capacity of 122 mAh g–1 at 20 mA g–1 in the first discharge, superior rate performance, and good cycling stability (75% capacity retention cycled at a high rate of 500 mA g–1 after 200 cycles). Besides, the K ion diffusion coefficient of the K0.67Mn0.83Ni0.17O2 electrode can reach 10–11 cm2 s–1, which are larger than the Ni-free electrode. The X-ray diffraction and electron diffraction analyses demonstrate that appropriate nickel could suppress the Jahn–Teller effect and reduce the structural deterioration, resulting in more migration pathways for K ions, thus enhancing the rate capability and cycling performance. These results provide a strategy to develop high-performance cathode materials for PIBs and deepen the understanding of structural deterioration in layered manganese-based oxides.