In recent years there has been considerable interest in Mg‐based nanomaterials for hydrogen storage. In this work, we study experimentally the thermodynamical, electrochemical and electronic properties of a new class of hydride Mg2Ni/LaNi5 nanocomposites. The nanocrystalline Mg2Ni and LaNi5 alloys were prepared by mechanical alloying (MA) followed by annealing. We have measured XPS spectra of in‐situ prepared nanocrystalline and microcrystalline Mg2Ni and LaNi5 thin films and compared with those obtained for ex‐situ prepared bulk materials. Results showed that the XPS valence bands measured for MA nanocrystalline alloys and composites showed a significant broadening compared to those obtained for microcrystalline materials. The nanosizing have been found to greatly influence the hydrogen storage properties of Mg‐based nanomaterials. The results show that Mg1.5Mn0.5Ni/LaNi3.75Mn0.75Al0.25Co0.25 composite nanomaterial releases 1.6 wt.% hydrogen at room temperature. The nanocrystalline metal hydrides offer a breakthrough in prospects for practical applications. (© 2011 WILEY‐VCH Verlag GmbH & Co. KGaA, Weinheim)