The detailed structural change in the charge–discharge process was investigated for the 20mol% aluminum-substituted α-nickel hydroxide by using high-energy synchrotron X-ray diffraction (XRD), X-ray absorption fine structure (XAFS) and transmission electron microscopy (TEM) analysis. The 20mol% aluminum-substituted α-nickel hydroxide showed the α-Ni(OH)2/γ-NiOOH phase transformation in the charge–discharge process. The structural refinement has been done successfully on the basis of two phase models of the ideal phases and the fault ones, including the occupation sites for the potassium ions and H2O (OH−) molecules. The substituted aluminum ions were situated on both nickel sites and 18h sites in the interlayer. The α-Ni(OH)2 structure would be stabilized by the presence of the aluminum ions on the 18h sites. The α-Ni(OH)2 phases were transformed to the β-Ni(OH)2 phases after 50 cycles because the aluminum ions on the 18h sites would be migrated from the bulk to the surface.