The interaction between sodium borohydride (NaBH4) and water vapor leading to hydrolysis and hydrogen generation has been investigated by a visual technique. In situ video monitoring confirms that reaction is preceded by deliquescence of NaBH4 upon exposure to water vapor, forming a viscous liquid solution that releases hydrogen. A regime of temperature and relative humidity under which the deliquescence is favorable has been determined. A relative humidity threshold exists below which NaBH4 powder does not absorb water vapor into the bulk to form a solution and thereby does not undergo reaction to form hydrogen. The deliquescence behavior of NaBH4 in water vapor provides an alternative reaction pathway that has potential to improve hydrogen storage density by reducing excess water and other additives.