LiAlyCo1-yO2 solid solutions of alpha-NaFeO2 structure type have been synthesized from homogeneous hydroxide precursors. X-ray powder diffraction and scanning transmission electron microscopy show that single-phase solid solutions are formed up to y approximate to 0.5 at 800 degrees C in air. Electrochemical tests using nonaqueous liquid electrolyte cells shows that the open-circuit voltage and working voltage increase with Al content as predicted by ab initio calculations [Ceder et al., Nature, 392, 694 (1998)],(1) while capacity fade was significant during cycling at room temperature. However, both the absolute capacity and cycleability were improved at 55 degrees C.