Layered P2-Na_x[Ni_1/3Mn_2/3]O₂ (0 < x < 2/3) is investigated as a cathode material for Na-ion batteries. A combination of first principles computation, electrochemical and synchrotron characterizations is conducted to elucidate the working mechanism for the improved electrochemical properties. The reversible phase transformation from P2 to O2 is observed. New configurations of Na-ions and vacancy are found at x = 1/3 and 1/2, which correspond to the intermediate phases upon the electrochemical cycling process. The mobility of Na-ions is investigated using the galvanostatic intermittent titration technique (GITT) and the Na diffusion barriers are calculated by the Nudged Elastic Band (NEB) method. Both techniques prove that the mobility of Na-ions is faster than Li-ions in the O3 structure within the 1/3 < x < 2/3 concentration region. Excellent cycling properties and high rate capability can be obtained by limiting the oxygen framework shift during P2–O2 phase transformation, suggesting that this material can be a strong candidate as a sustainable low-cost Na-ion battery cathode.