Mg-substituted Li(Ni,Co,Al)O2 have been prepared by a co-precipitation method and examined by XRD, neutron diffraction, X-ray absorption, magnetization and electrochemical measurements. Neutron diffraction measurement indicated that the Mg ions were mostly substituted for Ni ions located in transition metal layers in LiNi0.75Co0.15Al0.05Mg0.05O2. Although a tiny amount of Ni ions in lithium layers in LiNi0.8Co0.15Al0.05O2 was detected by magnetization measurements, such Ni ions decreased by Mg-substitution. The Mg-substitution for Ni in LiNi0.75Co0.15Al0.05Mg0.05O2 was also confirmed by X-ray absorption measurements. The 500mAh-type cylindrical lithium-ion cells of LiNi0.8−x Co0.15Al0.05Mg x O2 (x =0, 0.05) with graphite negative-electrode were prepared and their battery performances were evaluated by cycling test at 2C charge/discharge rate at 60°C. A lithium-ion cell of LiNi0.75Co0.15Al0.05Mg0.05O2 exhibited better capacity retention and smaller battery resistance than that of LiNi0.8Co0.15Al0.05O2 after 500 cycles. Electrochemical impedance spectroscopy revealed that the Mg-substitution suppressed the increase in charge-transfer resistance upon cycling. The effects of Mg-substitution in LiNi0.8Co0.15Al0.05O2 were discussed in terms of crystal structure and battery performance.