We report a detailed study of the dilution of the magnetic properties of stage-1 CoCl2-graphite intercalation compounds (GIC’s) with nonmagnetic MgCl2. The substitution of magnetic ions by nonmagnetic ions reduces the three-dimensional antiferromagnetic ordering temperature TN, and reduces the low-temperature transition field Ht that is a measure of the antiferromagnetic interlayer coupling. The intercalate layer in the stage-1 CoxMg1-xCl2-GIC’s fills only 85% of the available volume of the intercalate gallery. The extrapolated value of the Co concentration, xp=0.65, at which Ht and TN go to zero, suggests that the 15% concentration of voids is distributed randomly throughout the intercalate layer. It is proposed that for x≥0.65 there is a ...