Provided are a method of preparing a cathode active material, a composite cathode active material, and a cathode and a lithium battery containing the composite cathode active material. The method includes mixing a transition metal source and a reducing agent to prepare a cathode active material precursor; and mixing and calcining the cathode active material precursor to prepare a lithium transition metal oxide, wherein a supplied amount of the reducing agent is about 0.003 mole/hr or less with respect to 1 mole/hr of a supplied amount of the transition metal source.