Single Gd 2 Co 7 -type phase La 0.65 Gd 0.10 Mg 0.25 Ni 3.50 alloy is prepared with induction melting followed by annealing treatment. Rietveld refinements show that the as-cast alloy consists of CaCu 5 -type phase, Gd 2 Co 7 -type phase and Ce 5 Co 19 -type phase. At temperature of 1123-1248 K, the CaCu 5 -type and Ce 5 Co 19 -type phases transform into Gd 2 Co 7 -type phase via peritectic reactions. As annealed at 1248 K for 36 h, the CaCu 5 -type and Ce 5 Co 19 -type phases totally transform into Gd 2 Co 7 -type phase and the alloy shows a single phase structure. The increasing abundance of Gd 2 Co 7 -type phase makes a significant improvement on the discharge capacity and the Gd 2 Co 7 -type single phase alloy shows a superior discharge capacity of 386 mAh g −1 . Moreover, the Gd 2 Co 7 -type single phase alloy exhibits preferable capacity retention, which is up to 88.4% at the 160th cycles. The pulverization of the single phase alloy mainly occurs at earlier stage and the average particle size is not significantly reduced after 50 charge/discharge cycles. It is found that the oxidation of Mg mainly occurs at an early stage, while the oxidation of La happens in the whole process of charge/discharge cycling. Moreover, the oxidation of La gets aggravated after 100 cycles as the hydroxides of La is observed growing from nanoscale (<100 nm) needles (100th cycles) to micrometer-size (>2 μm) rods (150th cycles).