Exfoliation of layered materials such as graphite and transition metal dichalcogenides into mono- or few-layers is of significant interest for both the fundamental studies and potential applications. Here we report a systematic investigation of the fundamental factors governing the liquid exfoliation process and the rational design of a cosolvent approach for the exfoliation of layered materials. We show that Young's equation can be used to predict the optimal cosolvent concentration for the effective exfoliation of graphite and molybdenum disulphide in water mixtures with methanol, ethanol, isopropanol and t-butyl alcohol. Moreover, we find that the cosolvent molecular size has an important role in the exfoliation yield, attributed to the larger steric repulsion provided by the larger cosolvent molecules. Our study provides critical insight into the exfoliation of layered materials, and defines a rational strategy for the design of an environmentally friendly pathway to the high yield exfoliation of layered materials.