A positive active material for use in a positive electrode and a rechargeable lithium battery includes a lithium cobalt oxide including a secondary particle having an average particle diameter of about 15 μm to about 25 μm, wherein the secondary particle includes a plurality of primary particles having an average particle diameter of about 2 μm to about 10 μm, and the positive active material has a pellet density of greater than or equal to about 3.80 g/cm3. A method of manufacturing the positive active material includes heat-treating a cobalt-containing compound at a temperature of greater than or equal to about 900° C. to form a cobalt oxide comprising Co3O4 and CoO, and reacting the cobalt oxide with a lithium compound to prepare the lithium cobalt oxide.