Lithium- and manganese-rich layered oxides (LMRs) are promising positive electrode materials for next-generation rechargeable lithium-ion batteries. Herein, the structural evolution of Li1.2Ni0.2Mn0.6O2 during the initial charge-discharge cycle was examined using synchrotron-radiation X-ray diffraction, X-ray absorption spectroscopy, and nuclear magnetic resonance spectroscopy to elucidate the unique delithiation behavior. The pristine material contained a composite layered structure composed of Ni-free and Ni-doped Li2MnO3 and LiMO2 (M = Ni, Mn) nanoscale domains, and Li ions were sequentially and inhomogeneously extracted from the composite structure. Delithiation from the LiMO2 domain was observed in the potential slope region associated with the Ni2+/Ni4+ redox couple. Li ions were then extracted from the Li2MnO3 domain during the potential plateau and remained mostly in the Ni-doped Li2MnO3 domain at 4.8 V. In addition, structural transformation into a spinel-like phase was partly observed, which is associated with oxygen loss and cation migration within the Li2MnO3 domain. During Li intercalation, cation remigration and mixing resulted in a domainless layered structure with a chemical composition similar to that of LiNi0.25Mn0.75O2. After the structural activation, the Li ions were reversibly extracted from the newly formed domainless structure.