The role of iron sulfide (FeS) in initial cell activation and degradation in Na–NiCl2 battery was investigated in this work. The research focused on identifying the effects of FeS levels on the electrochemical performance and morphological changes in the cathode. The x-ray photoelectron spectroscopy study along with battery tests revealed that FeS plays a critical role in initial battery activation by removing passivation layers on Ni particles. It was also found that the optimum level of FeS in the cathode resulted in suppressing Ni particle growth and improved battery cycling performance. The results of electrochemical characterization indicated that sulfur species generated in situ during initial charging, such as polysulfide and element sulfur, are responsible for removing the passivation layer. Consequently, the cells containing elemental sulfur in the cathode exhibited similar electrochemical behavior during initial charging compared to the cells containing FeS.