Recent reports on high capacities delivered by Li-excess transition-metal oxide cathodes have triggered intense interest in utilizing reversible oxygen redox for high-energy battery applications. To control oxygen electrochemical activities, fundamental understanding of redox chemistry is essential yet has so far proven challenging. In the present study, micrometer-sized Li1.3Nb0.3Mn0.4O2 single crystals were synthesized for the first time and used as a platform to understand the charge compensation mechanism during Li extraction and insertion. We explicitly demonstrate that the oxidation of O2– to On– (0 < n < 2) and O2 loss from the lattice dominates at 4.5 and 4.7 V, respectively. While both processes occur in the first cycle, only the redox of O2–/On– participates in the following cycles. The lattice anion redox process triggers irreversible changes in Mn redox, which likely causes the voltage and capacity fade observed on this oxide. Two drastically different redox activity regions, a single-phase behavior involving only Mn3+/4+ and a two-phase behavior involving O2–/On– (0 ≤ n < 2), were found in LixNb0.3Mn0.4O2 (0 < x < 1.3). Morphological damage with particle cracking and fracturing was broadly observed when O redox is active, revealing additional challenges in utilizing O redox for high-energy cathode development.