Microstructures such as micro-strain, crystallite as well as stacking faults can result in broadening of X-ray diffraction lines. Based on least square principle, new computation method and programs, which can separate the two-fold broadening effect caused by crystallite/stacking faults and which can separate the three-fold broadening effect caused by crystallite/residual stress/stacking faults, have been proposed. As a result, micro-strain and crystallite sizes as well as stacking fault probability can be calculated respectively and investigated in detail. Then the microstructures of β-Ni(OH)2 are investigated by means of these methods. The main results are as follows: 1) The shape and size of crystallite as well as stacking fault probability of raw β-Ni(OH)2 are dependent on its preparation technique. 2) Activation changes the microstructure of β-Ni(OH)2. It transforms the crystallite shape from short-fat cylinder into polyhedrons or nearly equiaxial grains.Activation also alters the residual strain states and stacking fault probability. 3) After charge-discharge and cycle-lifetime testing, the crystallites of β-Ni(OH)2 are fined further and its residual strain and fault probability were alternated. The extent of these effects are dependent on circulating conditions. 4) Calcium additive in β-Ni(OH)2 restrains grain fining process and turns twin fault into deformation fault. 5) Comprehensive analysis reveals that micro structural parameters of β-Ni(OH)2 are correlated with some performance of Ni-MH battery.