The results of a first principles investigation of lithium diffusion within the layered form of LixCoO2 are presented. Kinetic Monte Carlo simulations predict that lithium diffusion is mediated through a divacancy mechanism between x = 0 and x < 1 and with isolated vacancies at infinite vacancy dilution. The activation barrier for the divacancy migration mechanism depends strongly on lithium concentration resulting in a diffusion coefficient that varies within several orders of magnitude. We also argue that the thermodynamic factor in the expression of the chemical diffusion coefficient plays an important role at high lithium concentration.