An object of the present invention is to provide a hydrogen absorbing alloy powder for use in the negative electrodes of alkaline rechargeable batteries which has excellent initial characteristics and a high rate discharge property, exhibits satisfactory life characteristics, and is hence very beneficial from a practical point of view, as well as a process for producing the same. Specifically, the present invention provides a hydrogen absorbing alloy powder for use in the negative electrodes of alkaline rechargeable batteries which has an average particle diameter of 5 to 20 .mu.m and an oxygen content of 2,000 to 6,000 ppm and, moreover, wherein the oxygen on the surfaces of hydrogen absorbing alloy particles is present in the form of hydroxyl groups.