Understanding chemomechanical degradations of layered oxide cathodes is critical to developing next-generation cathodes for lithium-ion batteries. So far, although the multimodal phase degradations in layered cathodes have been extensively studied, current understanding of their mechanical failure is only limited to cracking. Here, by using deep-learning-aided super-resolution imaging, we uncover a stress-driven phase degradation mechanism distinct from a conventional pathway driven by delithiation-induced self-destabilization in a technologically important layered cathode. We show that severe lattice bending caused by chemomechanical stress concentration could directly lead to phase transformation through interlayer shear. The O3→O1 transformation forms not only in bending bands but also in bending-induced kink structures, suggesting that the stress-driven phase transformation is a typical degradation modality widely existing in the material. Density functional theory (DFT) calculations confirm that the bending-induced O3→O1 phase transformation in delithiated lattice is energetically favorable. Our work offers new understanding of the mechanical deformation-induced phase transformation in layered oxide cathodes.