Layered α-Co(OH)2 nanosheets have been widely investigated as one of the promising supercapacitor materials owing to its high theoretical specific capacitance (3,460Fg−1). However, their poor electrical conductivity, poor stability, and unclear charge storage mechanism limit their practical use in energy storage systems. To address the first two drawbacks of layered Co(OH)2, conductive silver nanoparticles (AgNPs) with a finely tuned loading content were for the first time incorporated to the layered Co(OH)2 structure coated on a flexible reduced graphene oxide (rGO)paper substrate. In situ electrochemical X-ray absorption spectroscopy (XAS) was also used to investigate the charge storage mechanism of AgNPs/Co(OH)2 electrode. It was found that the incorporation of AgNPs with an average diameter of <10nm can significantly enhance the charge storage capacity of Co(OH)2 due to high electrical conductivity leading to fast charge transport. The charge storage mechanism of the Ag-doped α-Co(OH)2 energy storage cell is based on an intercalation/de-intercalation process (a battery-like behavior) and a physical adsorption of solvated ions (a supercapacitor-like behavior). The incorporation of AgNPs to the layered Co(OH)2 nanosheets in this work can overcome the current drawbacks of the Co(OH)2, which may lead to practical use as a hybrid energy storage device.