Provided are a method of preparing a cathode active material including coating a surface of a lithium transition metal oxide with a lithium boron oxide by dry mixing the lithium transition metal oxide and a boron-containing compound and performing a heat treatment, and a cathode active material prepared thereby.A method of preparing a cathode active material according to an embodiment of the present invention may easily transform lithium impurities present in a lithium transition metal oxide into a structurally stable lithium boron oxide by performing a heat treatment near the melting point of a boron-containing compound.Also, a coating layer may be formed in which the lithium boron oxide is uniformly coated in an amount proportional to the used amount of the boron-containing compound even at a low heat treatment temperature.