Spherical β-Ni(OH)2 was modified by a low-cost method of normal ball milling (NBM), and the physical properties of both ball-milled and un-milled Ni(OH)2 were characterized by transmission electron microscopy, specific surface area, particle size distribution and X-ray diffraction. It was found that NBM could obviously increase the surface area, decrease the particle and crystallite size, and reduce the crystallinity of β-Ni(OH)2, which were advantageous to the improvement of the electrochemical activity of Ni(OH)2. NBM also lowered the packing density and flowability of Ni(OH)2, as revealed by the measurements of tapping density and angle of repose. Electrochemical performances of pasted nickel electrodes with an addition of ball-milled Ni(OH)2 to spherical Ni(OH)2 as the active material were investigated, and were compared with those of the pure spherical Ni(OH)2 electrodes. Charge/discharge tests showed that ball-milled Ni(OH)2 addition could enhance the charging efficiency, specific discharge capacity, discharge voltage and high-rate capability of the electrodes. This performance improvement could be attributed to a more compact electrode microstructure, better reaction reversibility and lower electrochemical impedance, as indicated by scanning electron microscopy, cyclic voltammetry and electrochemical impedance spectroscopy. Thus, it was an effective method to modify the microstructure and improve the electrochemical properties of pasted nickel electrodes by adding an appropriate amount of ball-milled Ni(OH)2 to spherical Ni(OH)2 as the active material.