All-solid-state lithium batteries are a promising alternative for next-generation safe energy storage devices, provided that parasitic side reactions and the resulting hindrances in ionic transport at the electrolyte-electrode interface can be overcome. Motivated by the need for a fundamental understanding of such an interface, we present here real-time measurements of the (electro-)chemical reactivity and local surface potential at the electrified interface (Li₂S)₃-P₂S₅ (LPS) and LiCoO₂ (LCO) using operando X-ray photoelectron spectroscopy (XPS) supplemented by X-ray photoemission electron microscopy (XPEEM). We identify three main degradation mechanisms: (i) reactivity at open circuit potential leading to the formation of reduced Co in the +2 oxidation state at the LCO surface, detected in the Co L-edge, which is further increased upon cycling, (ii) onset of electrochemical oxidation of the LPS at 2.3 V vs InLi_x detected in the S 2p and P 2p core levels, and (iii) Co-ion diffusion into the LPS forming CoS_x species at 3.3 V observed in both S 2p and Co 2p core levels. Concurrently, a local surface overpotential of 0.9 V caused by a negative localized charge layer is detected at the LPS–LCO interface. Furthermore, in agreement with previous theoretical results, the presence of a sharp potential drop at the interface between active materials and solid electrolyte is demonstrated in all-solid-state batteries.