Mechanical alloying process was introduced to produce nanocrystalline TiNi alloy. X-ray diffraction (XRD) analysis showed that, after 8 h of milling, the starting mixture of elements was decomposed into an amorphous phase. XRD confirmed formation of CsCl-type structure after annealing at 750 °C for 0.5 h. Atomic force microscopy observations revealed that 70% of grains had size below 100 nm. TiNi electrode alloy with and without palladium and/or multiwalled carbon nanotubes (MWCNTs) was prepared by ball co-milling. Scanning electron microscopy observations showed that after co-milling with 5 wt.% MWCNTs, particles size of TiNi alloy decreased. The TiNi + 5 wt.% Pd + 5 wt.% MWCNTs nanocomposite showed the highest discharge capacity (266 mAh/g at 3rd cycle). Addition of MWCNTs improved the electrode cycle stability.