Li-rich layered oxide 0.5Li2MnO3·0.5LiNi0.292Co0.375Mn0.333O2 was prepared by an aqueous solution-evaporation route. X-ray powder diffraction (XRD) showed that the as-synthesized material was a solid solution consisting of layered α-NaFeO2-type LiMO2 (M = Ni, Co, Mn) and monoclinic Li2MnO3. The superlattice spots in the selected area electron diffraction pattern indicated the ordering of lithium ions with transition metal (TM) ions in TM layers in this Li-rich layered oxide. Electrochemical performance testing showed that the as-synthesized material could deliver an initial discharge capacity of 267.7 mAh/g, with a capacity retention of 88.5% after 33 cycles. A new combination technique, multipotential step in situ XRD (MPS in situ XRD) measurement, was applied for the first time to investigate the Li-rich layered oxide. Using this approach, the relationships between kinetics and structural variations can be obtained simutaneously. In situ XRD results showed that the c parameter decreased from 3.70 to 4.30 V and increased from 4.30 to 4.70 V, whereas the a parameter underwent a decrease above 4.30 V during the first charge process. Below 3.90 V during the first discharge process, a slight decrease in the c parameter was found along with an increase in the a parameter. During the first charge process, the value of the coefficient of diffusion for lithium ions (DLi+) decreased to its mininum at 4.55 V, which might be associated with Ni(2+) migration, as indicated by both Ni occupancy in 3b sites (Ni3b%) in the Li(+) layers and complicated chemical reactions. Remarkably, a lattice distortion might occur within the local domain in the host stucture during the first discharge process, indicated by a slight splitting of the (003) diffraction peak at 3.20 V.