Homogeneous precipitation by urea decomposition has been shown to form powders of superior performance for use as the positive electrode of rechargeable batteries. Cobalt substituted [Alpha]-Ni(OH)2 powders prepared by this method have produced micron sized spherical particles with an inner structure of nanosized sheet-like crystallites, which demonstrate a very high specific surface area for the powder. Comparative electrochemical studies and phase analyses between homogeneously precipitated, commercial, and base precipitated Ni(OH)2 powders have shown that homogeneously precipitated powders, with or without cobalt, have the highest capacity and best reversibility characteristics. The effects of coprecipitation of cobalt versus mechanical mixing were studied. Results show that even though any type of cobalt addition will improve the capacity and reversible potential of the electrode, regardless of the preparation method, the most dramatic enhancement is seen with the substitution of cobalt for nickel within the structure.