Lithium/sulfur (Li/S) cells have attracted much attention due to their higher theoretical specific capacity and energy compared to those of current lithium-ion cells. However, the application of Li/S cells is still hampered by short cycle life. Sulfur-graphene oxide (S-GO) nanocomposites have shown promise as cathode materials for long-life Li/S cells because oxygen-containing functional groups on the surface of graphene oxide were successfully used as sulfur immobilizers by forming weak bonds with sulfur and polysulfides. While S-GO showed much improved cycling performance, the capacity decay still needs to be improved for commercially viable cells. In this study, we attempt to understand the capacity fading mechanism based on an ex situ study of the structural and chemical evolution of S-GO nanocomposite cathodes with various numbers of cycles using scanning electron microscopy (SEM), near edge X-ray absorption fine structure (NEXAFS) and X-ray photoelectron spectroscopy (XPS). It is found that both the surface morphologies and chemical structures of the cathode materials change considerably with increasing number of cycles. These changes are attributed to several unexpected chemical reactions of lithium with S-GO nanocomposites occurring during the discharge-charge processes with the formation of Li2CO3, Li2SO3, Li2SO4, and COSO2Li species. These reactions result in the loss of recyclable active sulfur on the surface of the electrode, and thus capacity fades while coulombic efficiency is near 100%. Moreover, the reaction products accumulate on the cathode surface, forming a compact blocking insulating layer which may make the diffusion of Li ions into/out of the cathode difficult during the discharge-charge process and thus lead to lower utilization of sulfur at higher rates. We think that these two observations are significant contributors to the capacity and rate capability degradation of the Li/S-GO cells. Therefore, for the rechargeable Li/S-GO cells, we suggest that the content of oxygen-containing functional groups on GO should be optimized and more stable functional groups need to be identified for further improvement of the cycling performance. The information we gain from this study may provide general insights into the fundamental understanding of the degradation mechanisms of other rechargeable Li/S cells using similar oxygen-containing functional groups as sulfur immobilizers.