The O3‐type NaNi0.5Mn0.5O2 (NM) layered cathode in sodium ion batteries (SIBs) undergoes structural distortion and capacity degradation during cycling, which seriously hinders its practical application. Herein, lanthanum (La) is employed as a dopant in O3‐NaNi0.5Mn0.5‐xLaxO2 (NML) cathodes, which triggered an “atomic knife” effect, reducing particle size, and stabilizing crystal structure. The larger La ions generated structural strain during grain growth at high temperatures, hindering the movement of grain boundaries and refining the size of NML particles. Comprehensive characterizations illuminated La doping‐induced atomic site occupancy and phase transformations within NML. A competitive phase formation between layered NML and perovskite LaMnO3 (LMO) is observed. Spontaneously formed perovskite LMO provides surface protection. Moreover, strong La─O bonds expand the Na interlayer spacing, enhancing Na+‐ion diffusion. Consequently, NML cathodes exhibit superior long‐term cycling stability and ultrahigh rate capacities compared to pristine NM cathode and most currently reported layered cathodes for SIBs.