Cylindrical nickel metal hydride (Ni-MH) battery with high specific volume capacity was prepared by using the oxyhydroxide Ni(OH)(2) and AB, type hydrogen storage alloy and adjusting the designing parameters of positive and negative electrodes. The oxyhydroxide Ni(OH)(2) was synthesized by oxidizing spherical beta-Ni(OH)(2) with chemical method. The X-ray diffraction (XRD) patterns and the Fourier transform infrared (FT-IR) spectra indicated that gamma-NiOOH was formed on the oxyhydroxide Ni(OH)(2) powders, and some H2O molecules were inserted into their crystal lattice spacing. The battery capacity could not be improved when the oxyhydroxide Ni(OH)(2) sample was directly used as the positive active materials. However, based on the conductance and residual capacity of the oxyhydroxide Ni(OH)(2) powders, AA size Ni-MH battery with 2560 mA.h capacity and 407 W-h-L specific volume energy at 0.2C was obtained by using the commercial spherical beta-Ni(OH)(2) and AB(5)-type hydrogen-storage alloy powders as the active materials when 10% mass amount of the oxyhydroxide Ni(OH)(2) with 2.50 valence was added to the positive active materials and subsequently the battery designing parameters were adjusted as well. The as-prepared battery showed 70% initial capacity after 80 cycles at 0.5C. The possibility for adjusting the capacity ratio of positive and negative electrodes from 1 : 1.35 to 1 : 1.22 was demonstrated preliminarily. It is considered the as-prepared battery can meet the requirement of some special portable electrical instruments.