The importance of electrochemical energy storage systems for large-scale application has been growing increasingly over the last decades. Due to high cost, limited source and several technical barriers of the lithium-ion batteries (LIBs), sodium-ion batteries (SIBs) are considered as one of promising candidates for large-scale energy storage systems based on their cost-effective, earth abundant and recyclable characteristics.[1] As promising cathode materials for SIBs, P2-type sodium iron manganese oxide with layered structures (Na x Mn y Fe1-y O2, 0.5 < x < 0.8) demonstrates similar high energy density analogous to the LiBs.[2] However, the capacity retention of the cell with layered structure cathode is not optimized especially when it is charged and discharged with wide voltage window to obtain higher capacity. The major reason for this is a phase transition induced by gliding of transition metal slabs, which causes irreversible structural changes gradually during cycling.[3]To address this phase transition issue, we introduce electrochemically inactive component (e.g., Mg2+) in the material. The introduction of the Mg2+ by substituting with existing transition metal(s) is able to provide improved capacity retention due to their enhanced structural stability. We systematically analyzed the capacity fading trends at high and low voltage regions, where each different transition metal dominantly contributes to the redox reactions, which provides mechanistic understanding of the structural degradation of P2-type NaxMnyFe1-yO2 and the effect of Mg2+ on transition metal redox behaviors. In addtion, by tracing the structural changes in the cathode, we demonstrated that the introduction of Mg2+ effectively abbreviates the unwanted phase transitions. The results can provide the insights of the phase transition mechanism and redox behaviors of layered type cathode materials and the strategies to stabilize the structure by employing electrochemically inactive substituent(s), thus enabling rational design of new cathode materials for the development of next generation SIBs.[1] M. D. Slater, D. Kim, E. Lee, C. S. Johnson, Adv. Funct. Mater. 23 (2013) 947-958.[2] C. Delmas, C. Fouassier, P. Hagenuller, Physica B+C 99 (1980) 81-85.[3] E. Talaie, V. Duffort, H. L. Smith, B. Fultz, L. F. Nazar, Energy Environ. Sci., 5 (2015) 2512. Acknowledgement J. Yang and S.-D. Han acknowledge funding support by the Laboratory Directed Research and Development (LDRD) program at National Renewable Energy Laboratory (NREL).The work done at Brookhaven National Laboratory was supported by Assistant Secretary for Energy Efficiency and Renewable Energy, Vehicle Technology Office of the U.S. DOE, through the Advanced Battery Materials Research (BMR) Program under contract DE-SC0012704.