We study the effective long-range Ising dipole model with a local exchange interaction appropriate for the dilute magnetic compound LiHoxY1−xF4. Our calculations yield a value of 0.12 K for the nearest neighbor exchange interaction. Using a Monte Carlo method we calculate the phase boundary Tc(x) between the ferromagnetic and paramagnetic phases. We demonstrate that the experimentally observed linear decrease in Tc with dilution is not the simple mean-field result, but a combination of the effects of fluctuations, the exchange interaction and the hyperfine coupling. Furthermore, we find a critical dilution xc = 0.21(2), below which there is no ordering. In agreement with recent Monte Carlo simulations on a similar model, we find no evidence of the experimentally observed freezing of the glassy state in our calculation. We apply the theory of Stephen and Aharony to LiHoxY1−xF4 and find that the theory does predict a finite-temperature freezing of the spin glass. Reasons for the discrepancies are discussed. The rare-earth compound LiHo x Y 1−x F 4 has been widely used as a model magnet displaying a wide range of phenomena. At T c =1.53 K the predominant longrange dipolar interaction causes a second order classical phase transition to a ferromagnetic state [1]. By applying a transverse magnetic field the order can be destroyed in a T=0 quantum phase transition at about 4.9 T[2]. Positional disorder can be introduced by substituting the magnetic Ho 3+ ions with non-magnetic Y 3+ ions. The disorder has been shown to cause a transition to glassy behavior at high dilution [3].A main attraction of LiHo x Y 1−x F 4 is that the microscopic model is well-known [3,4]. The ground state of the Ho 3+ ion in the crystal field is an Ising doublet, with the first excited state 11 K above the ground state. At the temperature range we consider here (T < 1.5 K) LiHoF 4 should be a very good realization of a dipolar Ising modelwhere J is the dipolar coupling constant, J ex the nearestneighbor exchange constant, r ij the interspin distance and z ij the interspin distance along the Ising axis. The summation is done over all Ho 3+ ions, which form a tetragonal Bravais lattice with four ions per unit cell. When diluted, a fraction x of the sites are occupied by non-magnetic Yttrium and not included in the above sum. The size of the unit cell is (1, 1, 2.077) in units of a = 5.175Å. If we express the interspin distance in units of a, then the dipolar coupling constant J = (gµ B /2) 2 /a 3 = 0.214K [4]. The exchange coupling J ex has been experimentally determined to about half of the nearest-neighbor dipolar coupling [5]. In our calculation we have neglected the next nearest neighbor exchange interaction, which was found to be about 5% of the nearestneighbor dipolar coupling [5]. In addition, we have left out the hyperfine coupling between the nuclear and electronic spins as well as the random fields generated by the breaking of crystal symmetries due to the dilution. The effects of these terms on our results will be discussed.