The aim of the present paper is to report results on hydrogenation behaviour of the new composite material Mg₂Ni: CNT. Admixing of carbon nanotubes (CNT) in storage material Mg₂Ni leads to noticeable enhancement in desorption kinetics as well as storage capacity. We have found that the composite material Mg₂Ni–2 mole% CNT is the optimum material. The Mg₂Ni–CNT composite exhibits hydrogen desorption rate of 5.7cc/g/min as against 3.0cc/g/min for Mg₂Ni alone (enhancement of ∼ 90%) and storage capacity of ∼ 4.20 wt% in contrast to ∼3.20 wt% for Mg₂Ni alone (increase of ∼ 31%). Feasible mechanisms for the enhancement of hydrogen desorption kinetics and storage capacity have been put forward.