Sulfide ion oxidation to elementary sulfur over NiPS3, which is an efficient catalyst for that process, has been studied by means of electrochemical measurements, electron spin resonance spectroscopy and X-ray photoelectron spectroscopy. Based on the results obtained by these physical methods and on reaction kinetics, a mechanism of the process is suggested. Reduction and oxidation steps of the catalytic cycle are modelled by the topotactic redox reaction of intercalation-deintercalation of hydrated alkali ions.