The layered intercalation compounds Li(Mn1-yCoy)O2; 0 ≤ y ≤ 0.5 cannot be prepared by conventional solid state reaction but have been synthesized using a solution-based route coupled with ion exchange. A continuous range of solid solutions with rhombohedral symmetry exists for 0.1 ≤ y ≤ 0.5. Consideration of transition metal to oxygen bond lengths indicates that Mn3+ is replaced by cobalt in the trivalent state. Localized high spin Mn3+ (3d4) induces a cooperative Jahn-Teller distortion in layered LiMnO2, lowering the symmetry from rhombohedral R3̄m to monoclinic (C2/m). Substitution of as little as 10% Mn by Co is sufficient to suppress the distortion in Li0.9(Mn0.9Co0.1)O2, whereas half the Li must be extracted from LiMnO2 to achieve a single undistorted rhombohedral phase. On removing and reinserting Li in LiMnO2 only half the quantity of Li (equivalent to a specific charge of 130 mAhg-1) may be reinserted on the first cycle; this substantial drop in capacity is eliminated with only 10% Co substitution. The latter material can sustain a large capacity on cycling (200 mAhg-1). Higher Co contents have somewhat lower capacities but fade less at higher cycle numbers. The marked improvement in capacity retention of the Co-doped materials compared with pure LiMnO2 may be related in part to the absence of the Jahn-Teller distortion. Electrochemical data indicate conversion to a spinel-like structure on cycling. Such conversion is progressively slower with increasing Co content. Cycling of this spinel-like material is significantly better than Co-doped spinel of the same composition. These materials are of interest as electrodes in rechargeable lithium batteries.