The structures and properties of hydrogen storage alloy Mg2Ni, of aluminum and silver substituted alloys Mg2-xMxNi (M = Al and Ag, x = 0.16667), and of their hydrides Mg2NiH4, Mg2-xMxNiH4 (M = Al and Ag, x = 0.125) have been calculated from first-principles. Results show that the primitive cell sizes of the intermetallic alloys and hydrides were reduced by substitution of Mg with Al or Ag. Also, the interaction of Ni-Ni was weakened by the substitution. A strong covalent interaction between H and Ni atoms forms tetrahedral NiH4 units in Mg2NiH4. The NiH4 unit near the Al/Ag atom became tripod-like NiH3 in Mg2-xMxNiH4 (M = Al, Ag), indicating that the hydrogen storage capacity was decreased by the substitution. The calculated enthalpies of hydrogenation for Mg2Ni, Mg2-xAlxNi and Mg2-xAgxNi are -65.14, -51.56 and -53.63 kJ/mol H-2, respectively, implying that the substitution destabilizes the hydrides. Therefore, the substitution is an effective technique for improving the thermodynamic behavior of hydrogenation/dehydrogenation in magnesium-based hydrogen storage materials. (C) 2010 Professor T. Nejat Veziroglu. Published by Elsevier Ltd. All rights reserved.