Abstract Alloy having the composition of Mg-72 mass%–Ni-20 mass%–La-8 mass% prepared by vacuum-induction melting was studied by means of optical microscopy, scanning electron microscopy, energy dispersive X-ray spectroscopy and X-ray diffraction analysis. Metallographic investigations evidence that the alloy has a fine and uniform grain structure which corresponds to the structure of a ternary eutectic alloy. The surface of a metallographic cross section of the alloy was subjected to hydrogenation in various conditions and studied by means of the mentioned methods. It is shown that during the initial stage of hydrogenation the phase La 2Mg 17 is decomposed at first. Then the phase LaH 3 is formed, while the formation of the MgH 2 phase proceeds at a slowest rate. This hydrogenation behaviour is explained by taking into account the microstructure peculiarities of the alloy.