Layered lithium nickel manganese cobalt oxides, Li(NixMnyCoz)O2 where x + y + z = 1 (NMCs), have been studied extensively due to their higher capacity, less toxicity and lower cost compared to LiCoO2. However, widespread market penetration of NMCs as cathodes for Li-ion batteries (LIBs) is impeded by their poor capacity retention and low rate capability. Coatings provide an effective solution to these problems. This article focuses on review of the recent advancements in coatings of NMCs from the mechanism viewpoint. This is the first time that coatings on NMCs are reviewed based on their functionalities and mechanisms through which the electrochemical properties and performance of NMCs have been improved. To provide a comprehensive understanding of the functions and mechanisms offered by coatings, the following functions and mechanisms are reviewed individually: (i) scavenging HF in the electrolyte, (ii) scavenging water molecules in the electrolyte and thus suppressing HF propagation during charge/discharge cycles, (iii) serving as a buffer layer to minimize HF attack on NMCs and suppress side reactions between NMCs and the electrolyte, (iv) hindering phase transitions and impeding loss of lattice oxygen, (v) preventing microcracks in NMC particles to keep participation of most NMC material in lithiation/de-lithiation, and (vi) enhancing the rate capability of NMC cathodes. Finally, the personal perspectives on outlook are offered with an aim to stimulate further discussion and ideas on the rational design of coatings for durable and high-performance NMC cathodes for the next generation LIBs in the near future.