The high natural abundance and low toxicity of iron oxides provide a strong motivation to develop iron-based lithium-ion battery cathode materials. T-LiFeO2 adopts a cation-ordered wurtzite structure consisting of apex-linked LiO4 and FeO4 tetrahedra. Chemical or electrochemical lithium extraction rapidly converts T-LiFeO2 to the spinel LiFe5O8 and leads to poor energy storage performance. We have investigated the role of Al and Ga substitution on the stability of T-LiFeO2. Partial substitution of Fe by Al leads to the formation of cation-disordered solid solutions. In contrast, neutron diffraction data reveal that the Ga-substituted phase LiFe0.5Ga0.5O2 adopts an Fe/Ga cation-ordered structure. Chemical delithiation of LiFe1–x M x O2 phases reveals that 25% Al or 50% Ga substitution stabilizes the T-LiFe1–x M x O2 phases with respect to spinel conversion. The delithiated phases show no evidence of cation migration or oxygen loss. However, Fe-XANES, O-XAS, and O-RIXS data indicate that lithium extraction does not proceed via simple oxidation of Fe3+ to Fe4+ but rather via an anion redox process involving the formation of localized “FeIV–O” centers. Electrochemical data indicate that the formation of FeIV–O centers is irreversible, and so these oxidized species accumulate with continued electrochemical cycling, leading to a rapid decline in energy storage capacity. The electrochemical behavior of LiFe0.5Al0.5O2 and LiFe0.5Ga0.5O2 is discussed in terms of their crystal chemistry to account for the differing electrochemical performance of the Al- and Ga-substituted materials.