Theoretical studies to investigate the effect of H absorption on the magnetic moment of small Ni-n clusters have been carried out using gradient corrected density functional approach. Our studies on clusters containing up to 4 Ni and 2 H atoms show that the successive addition of H atoms to Ni-n clusters leads to an oscillatory change in the magnetic moment. Electronic structure analysis shows that, in most cases, the changes in the magnetic moment can be related to the relative position of the majority and minority lowest unoccupied molecular orbital of the preceding cluster. Ni2H2 is found to be marked by energetically close isomers with spin singlet and triplet multiplicities. (C) 2002 Elsevier Science B.V. All rights reserved.