Two dimensional (2D) transition-metal dichalcogenides and their heterostructures are important materials for future electronic device applications. By using the first-principles calculations we investigate how the electronic and magnetic properties of MoS2 bilayer is modified by intercalating transition-metals (Fe, Co, and Ni). The Fe-intercalated MoS2 bilayer is found to be a non-magnetic gapless semimetal. Without spin–orbit coupling it has the Dirac state on the Γ-M line in k space at the Fermi level. The spin degeneracy of the Dirac state is removed by spin–orbit coupling. However, the bottom of the conduction band and the top of the valence band are in contact with the Fermi level making the system a non-magnetic gapless semimetal. The Dirac state is also observed in both Co-intercalated and Ni-intercalated MoS2 bilayers because they have the same symmetry in crystal structure as the Fe-intercalated MoS2 bilayer. The difference in the number of valence electrons in the intercalated atoms drastically change the electronic and magnetic properties. The Co-intercalated MoS2 bilayer is a ferromagnetic metal, where the Dirac state is below the Fermi level. The Ni-intercalated MoS2 bilayer is a non-magnetic narrow gap semiconductor, where the Dirac state is far below the Fermi level. The results revealed the electronic and magnetic properties of the transition-metal-intercalated MoS2 bilayers and will be useful for designing a variety of 2D materials. •The Dirac states of transition-metal (TM)-intercalated MoS2 bilayers are studied.•The Fe-intercalated MoS2 bilayer is a non-magnetic gapless semimetal.•Electronic and magnetic properties can be tuned by the type of TM intercalation.