A method of producing a hydrogen storage alloy, for use in alkaline storage batteries, includes two steps. A first step involves preparing alloy particles having a CaCu.sub.5-type crystal structure and the compositional formula MmNi.sub.xCo.sub.yMn.sub.zM.sub.1-z, wherein M represents at least one element selected from the group consisting of aluminum (Al) and copper (Cu), 3.0.ltoreq.x.ltoreq.5.2, 0.ltoreq.y.ltoreq.1.2, 0.1.ltoreq.z.ltoreq.0.9, and 4.4.ltoreq.x+y+z.ltoreq.5.4. A second step involves immersing the alloy particles in an acid treating solution containing a cobalt compound and a copper compound, each in the amount of 0.1 to 5.0% by weight based on the weight of the alloy particles, and an organic additive to remove oxide films from and to reductively deposit cobalt and copper on a surface of each alloy particle to form a surface region surrounding a bulk region and having a graded composition. When the sum in percentage of numbers of cobalt (Co) atoms and copper (Cu) atoms present in the surface region is given by a and that in the bulk region by b, the relationship a/b.gtoreq.1.3 is satisfied.