The performance of the positive electrode composed of a mixture of nickel hydroxide (Ni(OH)2) and a small amount of manganese dioxide (MnO2) was investigated for the positive electrode of Fuel Cell/Battery (FCB) system. It was found that the positive electrode can function not only as an active material of secondary batteries when it is charged but also as a catalyst of fuel cells when oxygen is supplied, which was confirmed by the following characterization: electrochemical characterization was performed with cyclic voltammetry (CV) and galvanostatic discharge curve in oxygen and oxygen-free atmosphere. CV of Ni(OH)2/MnO2 positive electrode exhibited the redox reaction of Ni(OH)2 as well as oxygen reduction reaction. It was observed that the discharge curves of positive electrode had two working potentials in half cell test when the electrode was charged and oxygen was supplied: one from the reactions of nickel oxyhydroxide (NiOOH); the other from the fuel cell reactions of manganese dioxide (MnO2). It was also observed that the discharge curves had two working voltages in full cell test when the cell was fully charged and oxygen was supplied: one at 1.2V from the battery reactions of NiOOH; the other at 0.8V from the fuel cell reactions of MnO2. In particular, the discharge capacity of overcharged cell was improved approximately 2 times compared with a battery of the same electrode quantity due to the additional function of this system as a fuel cell by using oxygen generated by water electrolysis. XRD analysis showed that there was no crystal structure change before and after (over)charge–discharge cycles. In summary, these experimental results showed that the novel bi-functional FCB system could provide an improved overall energy density per weight compared with conventional secondary batteries.