NdNi5 hydrogen storage alloy was prepared by direct electrochemical reduction of a solid mixture of Nd2O3-NiO (atomic Nd:Ni = 1:5) in molten LiCl. The cathodic reaction path of the mixed oxide was proposed; it was initiated by the reduction of NiO and promoted by NiNd2O4. The NdNi5 alloy with 1600 ppm oxygen content was successfully synthesized with 50% current efficiency within 1 h. The measured hydrogen capacity of NdNi5 exhibited 6.1 hydrogen atoms per alloy formula unit.