A new material containing 1.6 wt.% of hydrogen (Mg2NiH1.8) was synthesized by reactive mechanical grinding under hydrogen atmosphere by Orimo and Fujii [Orimo, S. and Fujii, H., J. Alloys and Compounds, 1996, 232, L16]. The microstructures of this alloy, Mg2NiH1.8, was investigated by high resolution transmission electron microscopy (HRTEM). It has been found from the HRTEM images that the texture mainly consists of nanocrystals of Mg2NiHx (x less than or equal to 0.3) with an average size of approximately 15 nm, and also found that heavily distorted regions exist around or between nanocrystals. The width or the thickness of these regions is thought to be approximately 1-2 nm. These results are consistent with the results deduced from the peak broadening of the X-ray diffraction pattern and magnetic analysis [Orimo S., Fujii, H. and Ikeda, K. Acta Metallurgica, accepted]. It is plausible to assume that these regions can contain an unexpected number of hydrogen atoms. (C) 1997 Elsevier Science Limited.