LaNi5 nanoparticles as small as 170 and 250 nm were prepared by combustion and precipitation methods followed by calcium hydride reduction, respectively. The formation of such small particles was due to the effective reduction of the nanoscale lanthanum/nickel oxide precursors at low temperatures (600 °C). LaNi5 nanoparticles were found to be stable and hydrogen cycling did not change their morphology but led to a significant decrease in crystallite size reflecting the formation of lattice defects. The reduction of particle size enhanced hydrogen kinetics with full desorption occurring in a few minutes. Particle size effects on thermodynamics were also investigated by measuring the equilibrium plateau pressure (Peq) of the LaNi5/H2 reaction at various temperatures. Nanosized LaNi5 showed a relatively large hysteresis between Peq for hydrogen absorption and desorption because of lattice defects. However, no significant changes in enthalpy and entropy were observed for these nanoparticles.