Using density functional theory we have investigated the feasibility of bare and Ni decorated Al12N12 cages for hydrogen storage. In the bare Al12N12 cage, each Al atom is capable of adsorption one H-2 in molecular form with the average adsorption energy of -0.165 eV. In addition, it is shown that hydrogen prefers to remain inside the Al12N12 cage with molecular form. In the Ni decorated Al12N12 cage, the most stable site for Ni atom is the bridge site over the Al-N bond shared by the six-membered rings (BH site) out of the cage. Ni atom of the NiAl12N12 cage has been found to adsorb up to three hydrogen molecules. It is demonstrated that up to 20 hydrogen molecules can be stored on the exterior surface and inside of the NiAl12N12 cage with total gravimetric density of 6.8 wt%. As the weight percentage hydrogen storage is increasing to 6.5 wt%, the minimum value of the Gibbs free energy becomes positive at 25 K. It indicates that high weight percentage hydrogen storage cannot be achieved in NiAl12N12 cages. Copyright (C) 2012, Hydrogen Energy Publications, LLC. Published by Elsevier Ltd. All rights reserved.