Stoichiometric compositions of ferrites with the chemical formula Li0.5−0.5xCoxFe2.4−0.5xDy0.1O4 with x=0, 0.25, 0.5, 0.75, 1.0 were prepared by the standard double sintering ceramic method. X-ray diffraction analysis confirmed the cubic spinel structure of the prepared samples. The structural, morphological and magnetic properties were studied by X-ray diffraction, infra-red spectroscopy (IR), scanning electron microscopy (SEM), vibrating sample magnetometry (VSM) and ac susceptibility measurements. Lattice constant, grain size and density increase whereas porosity decreases with the increase in Co2+ substitution. IR measurements show the characteristic ferrite bands. Spectral absorption bands were observed in IR spectroscopic analysis at ν1=564−601cm−1, ν2=486−519cm−1 and ν3=551−578cm−1. The cation distribution estimated by the X-ray diffraction is supported by magnetization and susceptibility studies. The saturation magnetization decreases from 44.25 to 17.14emu/g whereas coercivity remarkably increases from 240.69 to 812.14emu/g with increasing Co2+ substitution. The mechanisms involved are discussed.