We have synthesized lithiated nickel oxide-based cathode materials containing stoichiometric and excess lithium using a new low temperature colloidal paniculate sol-gel process. The process yields a xerogel precursor that transforms to the crystalline oxide at 800 °C in 2h. We studied the Li environment with nuclear magnetic resonance (NMR) and that of the transition metal ions with x-ray absorption spectroscopy. We measured samples of LiNi1−xCoxO2, with x = 0 and 0.25. The effect on each composition of the incorporation of 5 mol % Li was also examined. The precursor material appears to have no Ni3+, as indicated x-ray absorption measurements, and is highly disordered, showing little sign of interatomic correlations beyond the nearest neighbor in extended x-ray absorption fine structure (EXAFS) spectra. The 7Li NMR line widths and spin-lattice relaxation (T1) behavior are dominated by strong interactions with the paramagnetic Ni3+. The presence of 5 % excess Li causes almost no change in NMR line width or T1 in the mixed (Ni/Co) cathode, but does produce an almost 30% reduction in line width for the pure LiNiO2, implying that Co stabilizes the structure. The near-edge x-ray absorption measurements show the local Ni environment is relatively unaffected by Co substitution, a result confirmed by EXAFS analysis. The heat-treated samples are highly ordered, and both the near-edge and extended analysis imply Co substitutes primarily for Ni2+, not Ni3+. The Jahn-Teller distortion is apparent in both the stoichiometric and Li-excess materials.