Lithium magnesium cobalt oxide (LMCO) was synthesized with heating a reaction mixture of dehydrated magnesium cobalt hydroxide and Li2CO3 to stabilized crystal structure of LiCoO2. The sample was characterized by XRD. All diffraction lines could be indexed by assuming a hexagonal lattice. Rietvelt analysis indicated that magnesium were located at cobalt site in the layered structure. The voltage plateau around 4.1V (versus Li) for LiCoO2 was not observed for LMCO. The prismatic lithium-ion batteries of lithium magnesium cobalt oxide and graphite with γ-butyrolactone (GBL) were fabricated and examined in terms of rate capability, low temperature discharge characteristics, high-temperature storage, and safety inspection by so-called hot pot test of the positive electrolyte. Interesting phenomenon on thermal stability of the lithium magnesium cobalt oxide was reported.