The influences of the Li⁺/Ni²⁺ replacement modulated by minor Co dopant on cyclic capacity and rate performance of lithium-rich cathode material Li_1.2Ni_0.2−z/2Mn_0.6−z/2Co_zO₂ (z = 0, 0.02, 0.04, 0.10) were investigated from the microstructural point of view by comprehensive techniques of high-resolution transmission electron microscopy (HRTEM) imaging, atomic-resolution electron energy loss spectroscopy (EELS), selected-area electron diffraction (SAED), and X-ray diffraction (XRD). It is found that Co played a vital role in decreasing the Li⁺/Ni²⁺ replacement ratio in the hexagonal layered Li_1.2Ni_0.2−z/2Mn_0.6−z/2Co_zO₂ (Rm), which is closely related to the electrochemical performance. An evident cationic ordering in the transition metal layers and a stacking sequence vertical to the Li⁺ diffusion orientation were observed in the Li_1.2Ni_0.2−z/2Mn_0.6−z/2Co_zO₂ (z > 0) system rather than in the Li_1.2Ni_0.2Mn_0.6O₂ system. Compared with Li_1.2Ni_0.2Mn_0.6O₂, Li_1.2Ni_0.18Mn_0.58Co_0.04O₂ showed excellent electrochemical performance with increase in discharge capacity to 288.3 mA h g⁻¹ from 166.3 mA h g⁻¹, improvement in capacity retention to 98.6% from 73.9% at a current density of 0.1 C after 40 cycles, and enhancement in capacity to 161.4 mA h g⁻¹ from 113 mA h g⁻¹ at a higher rate of 2 C. The largest interlayer spacing (0.218 nm of O–Li–O layer), highest proportion of Mn⁴⁺ ion component, and the most remarkable superstructure diffraction spots were found for Li_1.2Ni_0.18Mn_0.58Co_0.04O₂ among all specimens, as confirmed by XRD refinement, EELS, HRTEM, and SAED. Three superstructure vectors modulated by 1/4, 2/4, 3/4 ( = [01]) were simultaneously observed for Li_1.2Ni_0.18Mn_0.58Co_0.04O₂, indicating a high degree of ordering. Our findings might shed new insights into the understanding of the Li⁺/Ni²⁺ replacement by doping minor amounts of Co for optimizing the electrochemical performance in Li-ion batteries cathode material from the microstructural point of view.