Li dispersed graphene with Stone-Wales (SW) defects was investigated for geometric stability and hydrogen storage capability using density functional theory (DFT) calculations. When the graphene with SW defects, which has the internal strain derived from rotated C-C bond, adsorbs Li adatoms, the strain is relieved by generating the buckling of graphene. This effect plays a crucial role in enhancing the binding energy (E-b) of Li adatoms, consequently allowing the atomic dispersion of Li adatoms on the graphene without clustering. The Li dispersed graphene with SW defects can accommodate four H-2 molecules with the range of 0.20-0.35 eV. This falls in a desirable range for feasible applications under ambient conditions. It is therefore anticipated that Li dispersed graphene with SW defects may be an ideal hydrogen storage media due to its geometric stability and high hydrogen storage capacity. Copyright (C) 2014, Hydrogen Energy Publications, LLC. Published by Elsevier Ltd. All rights reserved.