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One of the most challenging aspects of developing high-energy lithium-based batteries is the structural and (electro)chemical stability of Ni-rich active cathode materials at thermally-abused and prolonged cell cycling conditions. Here, we report in situ physicochemical characterizations to improve the fundamental understanding of the degradation mechanism of charged polycrystalline Ni-rich cathodes at elevated temperatures (e.g., ≥ 40 °C). Using multiple microscopy, scattering, thermal, and electrochemical probes, we decouple the major contributors for the thermal instability from intertwined factors. Our research work demonstrates that the grain microstructures play an essential role in the thermal stability of polycrystalline lithium-based positive battery electrodes. We also show that the oxygen release, a crucial process during battery thermal runaway, can be regulated by engineering grain arrangements. Furthermore, the grain arrangements can also modulate the macroscopic crystallographic transformation pattern and oxygen diffusion length in layered oxide cathode materials.