Layered and spinel transition metal oxides are one of the most technologically important cathode materials for alkali metal ion batteries because of their high energy/power density and excellent electrochemical reversibility. However, similar to many other cathode materials, unstable electrochemical performance on long‐term cycling impacts the cycle life of batteries. Some of the challenges are transition metal dissolution, electrolyte decomposition, surface reconstruction, and chemomechanical breakdown of cathode materials. Most of these degradation phenomena originate from the surface of cathode materials. Owing to different local chemical environments, the surface chemistry of a cathode is distinctively unique from that of the bulk. Even though the surface region of a battery particle only accounts for a small fraction of the entire particle and contributes marginally to the overall capacity, surface‐related chemical and structural transformations can be the major factors in governing the degradation pathway of a cathode material. Herein, we have mechanistically discussed the origin and propagation of these degradation phenomena and their implications in the cycle life of a battery. Moreover, the techniques that mitigate and prevent these degradation pathways are explained. A complete understanding of the instability issues can promote a rational design of stable cathode materials for alkali metal ion batteries.