A multi‐compositional particulate Li[Ni_0.9Co_0.05Mn_0.05]O₂ cathode in which Li[Ni_0.94Co_0.038Mn_0.022]O₂ at the particle center is encapsulated by a 1.5‐μm‐thick concentration gradient (CG) shell with the outermost surface composition Li[Ni_0.841Co_0.077Mn_0.082]O₂ is synthesized using a differential coprecipitation process. The microscale compositional partitioning at the particle level combined with the radial texturing of the refined primary particles in the CG shell layer protracts the detrimental H2 → H3 phase transition, which normally occurs abruptly in Ni‐enriched Li[Ni_xCo_yMn_z]O₂ (NCM) cathodes in the deeply charged state giving rise to a sharp change in the unit cell dimensions. This protraction, which is confirmed by in‐situ X‐ray diffraction and transmission electron microscopy, allows effective dissipation of the internal strain generated upon the H2 → H3 phase transition, markedly improving cycling performance and thermochemical stability as compared to those of the conventional single‐composition Li[Ni_0.9Co_0.05Mn_0.05]O₂ cathode. The compositionally partitioned cathode delivers a discharge capacity of 229 mAh g^‐1 and exhibits capacity retentions of 92% after 100 cycles in a coin‐type half cell (cf. 85% for the conventional cathode) and 88% after 1,000 cycles in a pouch‐type full cell (cf. 68% for the conventional cathode). Thus, the proposed cathode material provides an opportunity for the rational design and development of a wide range of multi‐functional cathodes, especially for Ni‐rich NCM cathodes, by compositionally partitioning the cathode particles and thus optimizing the microstructural response to the internal strain produced in the deeply charged state.