An initial search with density functional theory to sort through potential cathode materials based on their Li intercalation potentials and electronic structures was carried on LiNi(1/3)TM1(1/3)TM2(1/3)O(2) systems, where TM1 is a 3+ transition metal (Co3+, Al3+, Fe3+ etc.) and TM2 is a 4+ transition metal (Ti4+, Zr4+, Mn4+ etc.). Fe substitution is found to be advantageous because among the compounds investigated it shows the lowest voltage at the last stage of the charge. LiNi1/3Fe1/6Co1/6Mn1/3O2 was synthesized by a sol-gel method and used to confirm that Fe substitution leads to a lower potential at the end of charge. Both X-ray photoelectron spectroscopy and first principles electronic structure computations indicate that Ni and Fe are simultaneously oxidized in this material. Computations further indicate that Co will only be oxidized at the very end of charge. The LiNi1/3Fe1/6Co1/6Mn1/3O2 compound synthesized at 750 degreesC shows reversible capacity of 150 mAh/g with reasonably good capacity retention. (C) 2004 The Electrochemical Society.