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Developing suitable cathodes of sodium‐ion batteries (SIBs) with robust electrochemical performance and industrial application potential is crucial for the commercialization of large‐scale stationary energy storage systems. Layered sodium transition metal oxides, Na_xTmO₂(Tm representing transition metal), possessing considerable specific capacity, high operational potential, facile synthesis, cost‐effectiveness, and environmentally friendly characteristics, stand out as viable cathode materials. Nevertheless, the prevailing challenge of air‐induced degradation in most Na_xTmO₂significantly increases costs associated with production, storage, and transportation, coupled with a rapid decay in reversible capacity. This inherent obstacle inevitably impedes the advancement and commercial viability of SIBs. To address this challenge, it is essential to decode the chemistry of degradation caused by air exposure and develop protective strategies accordingly. In this review, a comprehensive and in‐depth understanding of the fundamental mechanisms associated with air‐induced degradation is provided. Additionally, the current state‐of‐the‐art effective protective strategies are explored and discuss the corresponding sustainability and scalability features. This review concludes with an outlook on present and future research directions concerning air‐stable cathode materials, offering potential avenues for upcoming investigations in advancing alkali metal layered oxides.