A dynamic in situ X-ray absorption study, in the energy dispersive mode, has revealed short-range structural changes taking place during the discharge of a nickel hydroxide film electrode. A Jahn-Teller distortion has been identified in the first Ni-O shell at overcharge, which diminishes during the discharge process. Throughout discharge, the first Ni-Ni shell moves antagonistically to Ni-O coordination. These structural changes and Ni K-edge shifts have been used as measures of Ni valency during film discharge. Correlation of the results with electrode charge leads to a simple mechanism, in terms of electron population at Ni sites, for the discharge process.