The electrochemical behaviour of the paste-type nickel hydroxide electrode with cobalt-modified nickel foam was investigated using galvanostatic charge-discharge, electrochemical impedance spectroscopy, cyclic voltammetry and current pulse relaxation methods. Experimental results showed that the performance of the nickel electrode with substrate deposition of a thin layer of cobalt was improved markedly. This improvement could be attributed to the enhanced electrical conduction between the substrate and the active material. The enhanced electrical conduction increases the charge efficiency and the discharge depth of the nickel electrodes and therefore increases the utilization of the active material. This suggests that the electrical conduction between the substrate and the active material is essential to the practical use of paste-type nickel hydroxide electrodes.