Chemical preintercalation of layered materials, used as electrodes in intercalation-based energy storage devices, represents a promising strategy to enhance electrochemical stability and extend cycle life. However, standardized synthesis approaches for the chemical preintercalation of diverse ions into various layered materials are lacking, necessitating the development of specific synthesis routes for each ion and layered phase combination. In this study, we present the first successful demonstration of Mg2+ ion chemical preintercalation into the interlayer region of α-MoO3, revealing its stabilizing effect during cycling in non-aqueous Li-ion cells. Using ethanol during hydrothermal treatment facilitated molybdenum reduction, which was critical for Mg2+ ion preintercalation. Interestingly, we found that Mg preintercalation was accompanied by the incorporation of water. Mg-preintercalated α-MoO3 exhibited enhanced charge storage capacity, electrochemical stability, and power capability compared to pristine α-MoO3 electrodes. This improved performance is attributed to the structural stabilization provided by Mg2+ pillars, which prevent undesirable phase transformations during repeated Li intercalation/deintercalation, and increased Li+ ion diffusion due to the shielding of electrostatic interactions between electrochemically cycled ions and the α-MoO3 lattice, enabled by structural water. Our study offers new insights into developing chemical preintercalation synthesis approaches that can be broadly applied to a wide range of pillaring ions and layered material hosts.