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Ni‐rich layered oxides are envisioned as the most promising cathode materials for next‐generation lithium‐ion batteries; however, their practical adoption is plagued by fast capacity decay originating from chemo‐mechanical degradation. The intrinsic chemical–mechanical instability, inherited from atomic‐ and nanoscale defects generated during synthesis, is not yet resolved. Here, atomic‐ and nanoscale structural evolution during solid‐state synthesis of Ni‐rich layered cathode, Li[Ni0.92Co0.03Mn0.05]O2, is investigated using combined X‐ray/neutron scattering and electron/X‐ray microscopy. The multiscale analyses demonstrate the intertwined correlation between phase transition and microstructural evolution, with atomic‐scale defects derived from the decomposition of precursors leading to the creation of intra/inter‐granular pores. The nucleation and coalescence mechanism of pore defects during the synthesis of Ni‐rich layered cathodes are quantitatively revealed. Furthermore, a modified synthetic route is proposed to effectively circumvent the formation of nanoscale defects in Ni‐rich layered cathodes by facilitating uniform synthetic reactions, resulting in superior electrochemical and microstructural stability. [ABSTRACT FROM AUTHOR]