Lattice oxygen redox offers an unexplored way to access superior electrochemical properties of transition metal oxides (TMOs) for rechargeable batteries. However, the reaction is often accompanied by unfavourable structural transformations and persistent electrochemical degradation, thereby precluding the practical application of this strategy. Here we explore the close interplay between the local structural change and oxygen electrochemistry during short- and long-term battery operation for layered TMOs. The substantially distinct evolution of the oxygen-redox activity and reversibility are demonstrated to stem from the different cation-migration mechanisms during the dynamic de/intercalation process. We show that the pi stabilization on the oxygen oxidation initially aids in the reversibility of the oxygen redox and is predominant in the absence of cation migrations; however, the pi-interacting oxygen is gradually replaced by sigma-interacting oxygen that triggers the formation of O-O dimers and structural destabilization as cycling progresses. More importantly, it is revealed that the distinct cation-migration paths available in the layered TMOs govern the conversion kinetics from pi to sigma interactions. These findings constitute a step forward in unravelling the correlation between the local structural evolution and the reversibility of oxygen electrochemistry and provide guidance for further development of oxygen-redox layered electrode materials. Transition metal oxide electrodes are promising for rechargeable batteries but are subject to suffer from structural transformations and electrochemical degradation. The evolution of oxygen-redox activity and reversibility in layered electrodes are shown to arise from cation-migration mechanisms during de/intercalation.