The fracture mechanisms of two different LaNi5 alloys (A and B) have been investigated during the first few hydrogen loading/unloading cycles that constitute activation of this material. The principal difference between the two formulations was the presence of Ni-deficient planar inclusions, oriented perpendicular to the crystallographic c-axis, in alloy A. Both types were found to fracture at high loadings of hydrogen (hydrogen-to-metal ratios of ca. 1) during the activation cycle, as a result of the differential expansion between the microdomains of the alpha- and beta-hydride phases. However, alloy A also fractured at an earlier stage in the activation cycle, at very low hydrogen-to-metal ratios (less than or equal to 0.06), by delamination at the planar inclusion boundaries. This had the effect of reducing the hysteresis during the first activation cycle, most probably due to faster kinetics. The implication is that the hydrogen storage properties of the alloy can be tailored by microstructural design.