Single-crystal cathode materials for lithium-ion batteries have attracted increasing interest in providing greater capacity retention than their polycrystalline counterparts. However, after being cycled at high voltages, these single-crystal materials exhibit severe structural instability and capacity fade. Understanding how the surface structural changes determine the performance degradation over cycling is crucial, but remains elusive. Here, we investigate the correlation of the surface structure, internal strain, and capacity deterioration by using operando X-ray spectroscopy imaging and nano-tomography. We directly observe a close correlation between surface chemistry and phase distribution from homogeneity to heterogeneity, which induces heterogeneous internal strain within the particle and the resulting structural/performance degradation during cycling. We also discover that surface chemistry can significantly enhance the cyclic performance. Our modified process effectively regulates the performance fade issue of single-crystal cathode and provides new insights for improved design of high-capacity battery materials.