Li6.5La3Zr1.5Ta0.5O12 (LLZTO) garnet material is a promising inorganic electrolyte for all-solid-state lithium metal batteries because of its safety, broad electrochemical stability and low air sensitivity. However, LLZTO faces critical challenges related to sintering and grain boundaries that adversely affect its mechanical and electrochemical properties. Here we propose oversaturation doping of yttrium into Li6.72La3.00Y0.22Zr1.28Ta0.50O12 (LLYZTO) using 1.0 wt% of (Y2O3)0.08(ZrO2)0.92 (YSZ). During annealing, a La–Y–O (LYO) nanoscale interphase forms at the grain boundaries. This material nanoengineering approach improves indentation fracture toughness, increases the critical current density and enhances bulk ionic conductivity while maintaining low electronic conductivity. The LLYZTO with 1.0 wt% of YSZ (LLYZTO–1.0 wt% YSZ) is more lithiophobic than its undoped counterpart, and accommodates the volume changes of LiCoO2 during battery operation, enabling a 2.2 mAh cm−2 all-solid-state Li||LiCoO2 coin cell to deliver 2.0 mAh cm−2 at 0.66 mA cm−2 for over 100 cycles at 30 °C and 1 MPa of stack pressure. The fracture toughness of LLYZTO–1.0 wt% YSZ also allows the sintering fabrication of a square 5.29-cm2 and 150 µm-thick electrolyte membrane, which can be effectively used in lab-scale Li||LiCoO2 pouch cells. We also demonstrate the extension of the LYO interphase approach to other Li-based inorganic solid electrolytes.