On-board hydrogen storage is an important obstacle to the development of a sustainable, ultra-low emission transportation system. A dry particle coating technique was used to coat micron-sized magnesium powders with Ni nanoparticles for hydrogen storage. Three parameters were explored in this study: powder size, nickel loading, and processing time. The composite materials were evaluated based upon a number of criteria, including the degree to which the nanoparticles were distributed over the Mg surface, the improvement in kinetics for hydrogen absorption, and the increased amount of hydrogen absorbed and desorbed. Comparisons were made between the bulk Mg powders and those coated with Ni. Due to the high shear forces it created, the dry particle coating system effectively distributed Ni nanoparticles onto the Mg powder surface. A coating process that required 48 hours using traditional ball milling was reduced to 90 minutes with the dry particle coating system. Magnesium powder with a mean diameter of 44 microns and a nickel loading of 2 atomic weight percent was the most kinetically active for hydrogen absorption under the conditions studied. Hydrogen absorption began at 150°C, and desorption started at 250°C. The dry particle coating system, however, did not alter the magnesium microstructure during 90 minutes of processing and did not produce the large surface areas generated by ball milling.