Spectroscopic and electrochemical diagnostic measurements are reported for the cell components of a Generation 2 (Gen2) Li-ion cell from the U. S. Department of Energy's Advanced Technology Development (ATD) project. The cells are composed of LiNi0.8Co0.15Al0.05O2 positive electrodes (cathode), carbon graphite anodes, and electrolyte consisting of 1.2 M LiPF6 in EC:EMC 3:7. Fluorophosphates were observed by F-19 and P-31 nuclear magnetic resonance (NMR) in the electrolyte obtained from a Gen 2 cell aged 72 weeks at 45 degrees C and presenting 50% power fade. These electrolyte decomposition products were also observed by P-31 solid-state NMR on the surface of the cathode of the same cell. Samples were cut from the aged cathode from the original cell, subjected to different treatments (ultrasonic washing in anhydrous dimethyl carbonate (DMC), pressing, ultrasonic washing and pressing), and subsequently reassembled into small lab cells for electrochemical characterization. These treatments recovered the capacity of the electrodes to within a few percent of the original value, with the most improvement being obtained with the washed and pressed cathode. The impedance of the cathodes was also lowered after the ultrasonic washing and pressing treatments. Electron microscopy revealed that the ultrasonic washing of the aged Gen 2 cathode material resulted in the removal of small particles covering the surface of the active cathode. These findings are interpreted in terms of a model whereby capacity loss, and thus power capability, is restored by removing the fluorophosphate deposit and restoring electronic contact to the active cathode material. (c) 2005 The Electrochemical Society. All rights reserved.