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In this work the effect of nickel (Ni) plating process on the hydrogen (H) and moisture content of hermetic packages such as those used in optoelectronics was investigated. The work offers an explanation of moisture formation inside hermetic packages by showing that the problem arises from the electroless plating of Ni, which is found to be inherently rich in H. The effects of the Ni plating process, baking, and Au thickness on the moisture and hydrogen content of hermetic packages were thoroughly explored. It was observed that baking the package components before sealing alleviates the problem of moisture formation inside the package but does not fully eliminate it. It was only after changing the Ni plating process from electroless to electrolytic that the moisture problem actually disappeared. This investigation showed that moisture formation inside hermetic packages is due to H evolution from the electroless Ni which eventually reacts with surface oxides to form H2O. SIMS analysis of electroless and electrolytic Ni showed that electroless Ni is around 10-fold richer in H compared with its electrolytic counterpart. SIMS analysis also showed that H content in electroless Ni can be significantly reduced with heat treatment.