In this paper, an investigation has been made on the effects of the annealing at 1273K for 7h on the microstructure and electrochemical properties of the low Co-containing hydrogen storage alloy MlNi3.8Co0.3Mn0.3Al0.4Fe0.2 for nickel/metal hydride (Ni/MH) battery electrode. X-ray diffraction (XRD) analysis and metallographic examinations show that annealing has no significant effect on the phase constituent and structure of the alloy, but can make the crystal lattice strain and composition segregation decrease, the dendrite structure disappear and the crystalline grain grow. The annealing at 1273K for 7h causes an increase in the maximum discharge capacity of the alloy electrode. Annealing can also bring about a decrease in the plateau potential and a considerable increase in the cycling stability of MlNi3.8Co0.3Mn0.3Al0.4Fe0.2 alloy electrode. The mechanism of the improvement in the cycling stability was discussed based on the alloy crystallographic structure and microstructure change due to annealing.