Sodium-ion batteries (SIBs) hold significant promise in energy storage devices due to their low cost and abundant resources. Layered transition metal oxide cathodes (NaxTMO2, TM = Ni, Mn, Fe, etc.), owing to their high theoretical capacities and straightforward synthesis procedures, are emerging as the most promising cathode materials for SIBs. However, the practical application of the NaxTMO2 cathode is hindered by an unstable interface, causing rapid capacity decay. This work reviewed the critical factors affecting the interfacial stability and degradation mechanisms of NaxTMO2, including air sensitivity and the migration and dissolution of TM ions, which are compounded by the loss of lattice oxygen. Furthermore, the mainstream interface modification approaches for improving electrochemical performance are summarized, including element doping, surface engineering, electrolyte optimization, and so on. Finally, the future developmental directions of these layered NaxTMO2 cathodes are concluded. This review is meant to shed light on the design of superior cathodes for high-performance SIBs.