A change in the electronic spin state of the surfaces relevant to Li (de)intercalation of nanosized stoichiometric lithium cobalt oxide LiCo(III)O-2 from low-spin to intermediate and high spin is observed for the first time. These surfaces are the ones that are relevant for Li (de)intercalation. From density functional theory calculations with a Hubbard U correction, the surface energies of the layered lithium cobalt oxide can be significantly lowered as a consequence of the spin change. The crystal field splitting of Co d orbitals is modified at the surface due to missing Co-O bonds. The electronic spin transition also has a significant impact on Co(III)-Co(IV) redox potential, as revealed by the change in the lithium (de)intercalation voltage profile in a lithium half cell.