We studied CoSi2 formation in the presence of Ge. Bilayers of Co/Ge/Si (interlayer) and Ge/Co/Si (capping layer) were annealed and phase formation was determined by sheet resistance and XRD. During the initial CoSi formation (similar to 400 degreesC), Ge is partly dissolved in the monosilicide. At higher temperature (> 600 degreesC), Ge is expelled from the CoSi, although for samples with a thick interlayer, 7-10% of Ge remains dissolved in the CoSi. The expulsion of Ge causes the formation of Ge-rich SiGe at the surface and interface of the monosilicide. With increasing temperature, the amount of SiGe present at the interface increases and the composition evolves towards Si0.5Ge0.5. The CoSi2 phase forms at increasingly higher temperatures for increasing Ge thickness. The delay in nucleation temperature saturates at approximately 750 degreesC for a Ge thickness larger than 3.5 nm. Similar behavior was observed for a Ge capping layer. The presence of Ge also influences the crystallographic properties of the CoSi, layer formed. For a Ge interlayer with a thickness smaller than 2 nm, polycrystalline CoSi2 is formed with a grain size that is larger than for the standard Co/Si reaction. For a Ge interlayer thicker than 2 nm, there is a preferential epitaxial orientation of the CoSi2. A model is presented to explain the delay in nucleation, the increased grain size and the preferential orientation of the CoSi2.