Nickel nanoparticles were prepared by the arc discharge method. Argon and argon/hydrogen mixtures were used as plasma gas; the evaporation of anode material chiefly resulted in the formation of different arc-anode attachments at different hydrogen concentrations. The concentration of hydrogen was fixed at 0, 30, and 50 vol% in argon arc, corresponding to diffuse, multiple, and constricted arc-anode attachments, respectively, which were observed by using a high-speed camera. The images of the cathode and anode jets were observed with a suitable band-pass filter. The relationship between the area change of the cathode/anode jet and the synchronous voltage/current waveform was studied. By investigating diverse arc-anode attachments, the effect of hydrogen concentration on the features of nickel nanoparticles were investigated, finding that 50 vol% H₂ concentration has high productivity, fine crystallinity, and appropriate size distribution. The synthesized nickel nanoparticles were then used as catalysts in a hybrid sodium–air battery. Compared with commercial a silver nanoparticle catalyst and carbon black, nickel nanoparticles have better electrocatalytic performance. The promising electrocatalytic activity of nickel nanoparticles can be ascribed to their good crystallinity, effective activation sites, and Ni/NiO composite structures. Nickel nanoparticles prepared by the direct current (DC) arc discharge method have the potential to be applied as catalysts on a large scale.