Integration of P2 and O3 phases in Na0.5Fe0.5Mn0.5O2 cathode via Li-ion substitution is proposed to enhance its electrochemical performance for sodium-ion battery applications. The formation of P2 and the combination of P2/O3 intergrowth were confirmed by X-ray diffraction refinement, high resolution transmission electron microscopy and X-ray photoelectron microscopy analyses. Various content of lithium was used to find optimum P2+O3 combinations. The optimized Li-ion substituted Na0.5(Li0.10Fe0.45Mn0.45)O2 showed a high initial discharge capacity of 146.2 mAh g−1 with improved cycling stability, whereas the pristine Na0.5Fe0.5Mn0.5O2 initially delivered a discharge capacity of 127.0 mAh g−1. In addition, the combination of P2+O3 increased its average voltage, which is important for achieving high energy density sodium-ion batteries. Overall, the prepared Na0.5(Li0.10Fe0.45Mn0.45)O2 electrode exhibited the improved cycling performance in terms of reversible capacity and rate capability compared to pristine Na0.5Fe0.5Mn0.5O2 electrode material.