Classical electrodes for Li-ion technology operate via an insertion/de-insertion process. Recently, conversion electrodes have shown the capability of greater capacity, but have so far suffered from a marked hysteresis in voltage between charge and discharge, leading to poor energy efficiency and voltages. Here, we present the electrochemical reactivity of MgH(2) with Li that constitutes the first use of a metal-hydride electrode for Li-ion batteries. The MgH(2) electrode shows a large, reversible capacity of 1,480 mAh g(-1) at an average voltage of 0.5 V versus Li(+)/Li(o) which is suitable for the negative electrode. In addition, it shows the lowest polarization for conversion electrodes. The electrochemical reaction results in formation of a composite containing Mg embedded in a LiH matrix, which on charging converts back to MgH(2). Furthermore, the reaction is not specific to MgH(2), as other metal or intermetallic hydrides show similar reactivity towards Li. Equally promising, the reaction produces nanosized Mg and MgH(2), which show enhanced hydrogen sorption/desorption kinetics. We hope that such findings can pave the way for designing nanoscale active metal elements with applications in hydrogen storage and lithium-ion batteries.