Surface coating of LiNi1/3Co1/3Mn1/3O2 with LiAlO2 nanoparticles has been attempted to improve the electrochemical properties of these materials as cathodes in lithuim-ion batteries. The coating is undertaken by a sol–gel method that uses C9H21O3Al, LiOH·H2O and LiNi1/3Co1/3Mn1/3O2. X-ray diffraction analysis shows that the LiAlO2 is composed of both α- and β-LiAlO2 phases. The average size of the particles is about 15 nm. The structure of LiNi1/3Co1/3Mn1/3O2 is not affected by the LiAlO2 nanoparticle coating. A 3 wt.% LiAlO2-coating increases the specific discharge capacity, provides excellent cycling performance (i.e. 96.7% capacity retention after 50 cycles at the 1 C rate) and improves the rate capability. By contrast, heavier coatings (5 wt.%) on LiNi1/3Co1/3Mn1/3O2 dramatically decrease both the discharge capacity and the rate capability, but enhance the cycle life.