Sodium-ion batteries (SIBs) have great potential for large-scale energy storage devices due to the high abundance, wide distribution, and nontoxicity of the resource. Among the various cathode materials, layered oxides are considered a strong contender in the future SIBs market due to their open two-dimensional sodium ion diffusion channels, high theoretical capacity, and ease of synthesis. Unfortunately, layered oxides face phase transition during cycling, accompanied by severe electrochemical performance degradation, which greatly limits the long cycling stability. Therefore, it is of great significance to fully understand the mechanism, the origin, the influenced factors, and the inhibition strategies of phase transitions to develop a good cathode material. This review focuses on the phase transition in layered oxide cathodes, pointing out the intrinsic causes and degradation mechanisms of phase transition. Moreover, we summarize the mainstream strategies to inhibit the phase transition, such as elemental doping, surface coating, and structural modification, as well as the novel strategy of introducing anionic redox. We hope that this review provides new comprehension in understanding the phase transition of layered oxides and in designing SIBs with superior performance.