Nickel oxide (NiO) is the most common low-cost high-performance anodic electrochromic material that is widely used in the applications for smart windows. The coloration mechanism is, however, still not well understood and we show that this is due to the evolving chemical nature of the film during the electrochromic process. Chemical bath deposited (CBD) NiO was studied using the near-grazing incidence angle Fourier transform infrared spectroscopy (NGIA FTIR) and endurance potential cycling. We will show that the initial hydration of NiO films toward Ni(OH)(2) proceeds gradually through a combination of coloration from hydroxyl (OH-) ions and bleaching through H+ ions. This process increases the optical modulation of the deposited film. However, when the OH- ion diffusion is significantly enhanced, OH- ion incorporation during coloration will lead to water incorporation. The extensive intercalated networks can then isolate NiOOH grains that results in irreversible coloration and this is commonly reported as degradation. We will propose a model to show that an isolation process can explain this degradation and can be easily reversible by annealing. This understanding of the coloration and degradation mechanisms suggests that an optimum control of hydroxyl ions is critical for both efficiency and durability of NiO electrochromic devices. (C) 2013 Elsevier B.V. All rights reserved.