Nickel hydroxide is prepared by neutralizing NiSO4 solution with 4.8M NaOH, followed by washing the precipitate and treating the slurry hydrothermally at different temperatures. The parameters varied are: initial nickel concentration; effect of presence of sodium ions during hydrothermal treatment; aging time after hydrothermal treatment. The samples so prepared are chemically analyzed and the physical and electrolytic properties such as tap density, percentage weight loss and discharge capacity are determined. On increasing the temperature from 60 to 160°C, the discharge capacity increases from 52 to 112mAhg−1. At 200°C, the discharge capacity decreases to 94mAhg−1. Allowing the hydroxide precipitate to age after hydrothermal treatment also causes a decrease in discharge capacity. The presence of excess sodium ions during hydrothermal treatment yields nickel hydroxide with a very low discharge capacity. The maximum discharge capacity of 160mAhg−1 is obtained for nickel hydroxide prepared under the following conditions: nickel concentration 43gl−1, neutralizing agent sodium hydroxide, time of hydrothermal treatment 2h, temperature during hydrothermal treatment 160°C. XRD patterns and FTIR spectra confirm the precipitate to be β-nickel hydroxide. The sample contains 62.89wt.% Ni with a tap density of 0.96gcm−3. TG–DTA measurements show a weight loss of 19% with an endothermic peak at 325°C which corresponds to the decomposition of nickel hydroxide to nickel oxide. The present method of preparing nickel hydroxide through hydrothermal treatment reduces the aging time to 2h and gives a product with good filtration characteristics.