A combination of first principles calculations and lithium NMR spectroscopy was used to examine the effect of electrochemical cycling on lithium ions located in the transition metal layers in layered lithium nickel manganates. These lithium ions participate in the electrochemical process with NMR results showing that they are removed from the octahedral sites on charging, but return on discharging. Calculations indicate that the lithium ions become increasingly unstable, as the concentration of vacancies in the lithium layers increases. A lithium ion nearby three vacancies in the lithium layers drops immediately, with no activation barrier, into the adjacent tetrahedral site in the lithium layers; charging to higher potentials is then required to remove this lithium ion. (C) 2004 The Electrochemical Society.