Li1.2Cr0.4Mn0.4O2 (0.4LiCrO2·0.4Li2MnO3) is an interesting intercalation-type cathode material with high theoretical capacity of 387 mAh g–1 based on multiple-electron transfer of Cr3+/Cr6+. In this work, it has been demonstrated that the reversible Cr3+/Cr6+ redox reaction can only be realized in a wide voltage range between 1.0 and 4.8 V. This is mainly due to large polarization during the discharge. The reversible migration of the Cr ions between octahedral and tetrahedral sites leads to large extent of cation mixing between lithium and transition metal layers, which does not affect the lithium storage capacity and stabilize the structure. In addition, a distorted spinel phase (Li3M2O4) is identified in the deeply discharged sample (1.0 V, Li1.5Cr0.4Mn0.4O2). The above results can explain the high reversible capacity and high structural stability achieved on Li1.2Cr0.4Mn0.4O2. These new findings will provide further in depth understanding on multielectron transfer and local structure stabilization mechanisms in intercalation chemistry, which are essential for understanding and developing a high capacity intercalation-type cathode for next generation high energy density Li-ion batteries.