We report herein the exceptional cycle stability of lithium cobalt oxide (LCO) in aqueous electrolytes of high lithium salt concentrations. We demonstrate retention of up to 87% of the initial discharge capacity after 1500 cycles at a 1C charge–discharge rate. We also demonstrate that LCO, when in contact with each of the aqueous electrolytes tested, exhibits a high electrode potential and a large initial discharge capacity, similar to that of LCO electrochemically cycled in conventional organic electrolytes. More importantly, our systematic studies and post-mortem analyses of LCO cells reveal that the primary mechanism of LCO degradation in aqueous electrolytes is the formation of a resistive layer of cobalt(II) oxide on the particles' surfaces. We show that higher electrolyte molarity and certain salt compositions may significantly reduce the layer thickness and dramatically improve LCO stability. These findings constitute a substantial step towards development of gravimetrically and volumetrically energy dense aqueous lithium ion batteries.