The electronic structures of Mg-doped LiCoO2 have been investigated by the first-principle pseudopotential method. The effect of Mg-doping content on the band structure and structural stability of LiCoO2 is presented. The results obtained via a full relaxation of the crystalline structure show that a rational amount of Mg-doping in LiCoO2 is helpful to enhance its electronic conductivity. However, the doping magnitude should be controlled within 15mol% of LiCoO2 in order to keep its crystalline structure unchanged. By combining total energy calculations with basic thermodynamics, the average intercalation voltages of this doped system have been predicted.