It was shown that the appearance of a secondary discharge plateau approximately 400 mV below the primary plateau can result from the reduction of oxygen. During the galvanostatic discharge of planar nickel-hydroxide films at room temperature and in 3 weight percent KOH solutions, the second discharge plateau was observed only in the presence of dissolved oxygen in the electrolyte. When the solution was deoxygenated, no residual capacity could be extracted from the films even at low discharge rates or from overcharged films. In addition, the duration of the second plateau is inversely proportional to the square of the discharge current, which is indicative of a diffusion-controlled process. The nickel hydroxide active material, rather than the electrolyte, seems to be the primary reservoir for the oxygen that is reduced on the second plateau.