Intercalation of lithium atoms between layers of 2D materials can alter their atomic and electronic structure. We investigate effects of Li intercalation in twisted bilayers of the transition metal dichalcogenide MoS$_2$ through first-principles calculations, tight-binding parameterization based on the Wannier transformation, and analysis of moire band structures through an effective continuum model. The energetic stability of different intercalation sites for Li between layers of MoS$_2$ are classified according to the local coordination type and the number of vertically aligned Mo atoms, suggesting that the Li atoms will cluster in certain regions of the moire superlattice. The proximity of a Li atom has a dramatic influence on the interlayer interaction between sulfur atoms, deepening the moire potential well and leading to better isolation of the flat bands in the energy spectrum. These results point to the usefulness for the use of chemical intercalation as a powerful means for controlling moire flat-band physics in 2D semiconductors.
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