Metal hydride (MH) electrodes are treated in an alkaline solution containing potassium borohydride (KBH4) to increase the discharge capacity and high-rate dischargeability and to improve the activation, electrocatalytic activity and cyclic stability. XPS and ICP analyses indicate that the nickel oxide on the surface of the hydrogen-storage alloy is partly reduced by the reduction treatment. Part of the atomic hydrogen released during this treatment is adsorbed on the surface of the alloy and penetrates into the lattice to form the hydride. It is found that a Ni-rich surface layer with a high electrocatalytic activity for the electrode reaction is produced because of the preferential dissolution of Mn and Al. In addition, the specific surface area of the treated alloy is increased. An AA-size Ni-MH battery has been assembled with the treated MH electrode as its negative electrode. The battery displays a superior high-rate dischargeability and better low-temperature characteristics.