The representative cuprate La2−xMxCuO4 with M=Sr and x=1/8 is studied via first-principles calculations in the high-temperature tetragonal (HTT), low-temperature orthorhombic (LTO), and low-temperature less-orthorhombic (LTLO) structures. By suppressing the magnetism and superconductivity, the LTLO phase, which has rarely been observed in La2−xSrxCuO4, is found to be the ground state where the structural phase transitions HTT→LTO→LTLO can be understood via phonon instability. Although the La-O composition is identified to be responsible for the phonon softening, the superconducting CuO2 layer is dynamically stable. The LTLO phase, which can exhibit an ∼20−meV splitting in the density of states, is proposed to have an intimate relationship with the observed pseudogap and the charge-density wave giving the stripe. We argue that at low temperatures, the superconducting LTO La1.875Sr0.125CuO4 competes with the phonon-preferred LTLO phase by spontaneously forming the Cooper pairs, resulting in suppressing the stripe. Therefore, the revealed LTLO phase is indispensable for understanding La2−xSrxCuO4.