The nanocrystalline NiO thin films with the mean size of ∼30nm are prepared by pulsed laser reactive ablation in an oxygen ambient and subsequent coated by MgO on the NiO film surface. As compared with bare NiO, coated NiO film electrode heat-treated at 500°C exhibits excellent structural stability and electrochemical performance. Excellent electrochemical performance, a reversible capacity as high as 650mAh/g in the range 0.01–3.0V at high discharge rate of 2C with a high capacity retention up to 150 cycles, could be achieved with MgO-coated NiO films. Preliminary electrochemical cycling measurements show that capacity retention with capacity fading for bare NiO and MgO-coated NiO film electrodes are ∼0.43 and 0.28% per cycle, respectively, at the discharge rate of 2C after 150 cycles. This result is related to good structural stability of the MgO-coated NiO film as verified by cyclic voltammetric (CV) measurement and scanning electron microscopy (SEM) analysis.