The growth morphology and electronic structure of Ni on Ag(100) has been studied with scanning tunneling microscopy (STM) and synchrotron based angle resolved photoemission spectroscopy. At deposition temperatures at or below 300 K, STM reveals Ni cluster growth on the surface along with some subsurface growth. Upon annealing to 420 K, virtually all Ni segregates into the subsurface region forming embedded nanoclusters. The electronic structure of Ni d bands in the unannealed surface shows dispersion only perpendicular to the surface whereas the annealed surface has Ni d bands that exhibit a three-dimensional-like structure. This is a result of the increased Ni d-Ag sp hybridization bonding and increased coordination of the embedded Ni nanoclusters.