© 2018 American Chemical Society. Chemical and mechanical properties interplay on the nanometric scale and collectively govern the functionalities of battery materials. Understanding the relationship between the two can inform the design of battery materials with optimal chemomechanical properties for long-life lithium batteries. Herein, we report a mechanism of nanoscale mechanical breakdown in layered oxide cathode materials, originating from oxygen release at high states of charge under thermal abuse conditions. We observe that the mechanical breakdown of charged Li1-xNi0.4Mn0.4Co0.2O2 materials proceeds via a two-step pathway involving intergranular and intragranular crack formation. Owing to the oxygen release, sporadic phase transformations from the layered structure to the spinel and/or rocksalt structures introduce local stress, which initiates microcracks along grain boundaries and ultimately leads to the detachment of primary particles, i.e., intergranular crack formation. Furthermore, intragranular cracks (pores and exfoliations) form, likely due to the accumulation of oxygen vacancies and continuous phase transformations at the surfaces of primary particles. Finally, finite element modeling confirms our experimental observation that the crack formation is attributable to the formation of oxygen vacancies, oxygen release, and phase transformations. This study is designed to directly observe the chemomechanical behavior of layered oxide cathode materials and provides a chemical basis for strengthening primary and secondary particles by stabilizing the oxygen anions in the lattice.