The epsilon polymorph of vanadyl phosphate ε-VOPO4 is a promising cathode material for high-capacity Li ion batteries, owing to its demonstrated ability to reversibly incorporate two lithium ions per redox center. As lithium is inserted into the nanosized particles within the cathode, the electrochemical reaction can be largely affected by the interfacial chemistry at the nanoparticle surface. We performed X-ray photoelectron spectroscopy using both soft (XPS) and hard (HAXPES) X-rays to chemically distinguish and depth-resolve the interfacial phase transitions in ε-VOPO4 electrodes as a function of electrochemical discharge. Our analysis shows that the second lithium reaction begins before the full incorporation of the first lithium. This results in a pronounced lithium gradient within the nanoparticles, with the ε-Li2VOPO4 phase only forming near the surface. These results indicate that a disruption of the kinetics are limiting the realized capacity in our hydrothermally synthesized ε-VOPO4. Moreover, from inspection of the valence band region, we were able to monitor the evolution of ε-VOPO4 to ε-Li2VOPO4 at the surface of our nanoparticles. These assignments are confirmed by hybrid density functional theory of the three end phases.