The emergence of anionic redox reactions in layered transition metal oxide cathodes provides practical opportunity to boost the energy density of rechargeable batteries. However, the activation of anionic redox reaction in layered oxides has significant voltage hysteresis and decay that reduce battery performance and limit commercialization. Here, we critically review the up-to-date development of anionic redox reaction in layered oxide cathodes, summarize the proposed reaction mechanism, and unveil their connection to voltage hysteresis and decay based on the state-of-the-art progress. In addition, advances associated with various modification approaches to mitigate the voltage hysteresis/decay in layered transition metal oxide cathodes are also included. Finally, we conclude with an appraisal of further research directions including rational design of high-performance layered oxide cathodes with reversible anionic redox reactions and suppressed voltage hysteresis/decay. Findings will be of immediate benefit to the development of layered oxide cathodes for high performance rechargeable batteries. [Figure not available: see fulltext.].