Catalysis by intermetallic compounds (IMCs) has recently received significant attention, and IMCs that are also capable of storing hydrogen, including RENi5-xAlx(RE = La, Er) and Mg2Ni, have been employed as catalysts for the hydrogenation of ethylene. RENi5-xAlxwith absorbed hydrogen exhibits improved catalytic activity and high levels of ethylene conversion. The reaction rate for RENi5-xAlxwith absorbed hydrogen is higher than those for pure Ni and Cu and close to that for Pd. Pulsed gas tests have demonstrated that the presence of absorbed hydrogen is essential for high catalytic activity. In this work, the role of absorbed hydrogen in catalytic reactions was assessed by performing the trial using deuterium. It was found that absorbed deuterium in ErNi3.75Al1.25Dnundergoes very little reaction with ethylene. A novel activation mechanism which is different from the reaction of absorbed hydrogen directly with C2H4was proposed. This mechanism was investigated based on adsorption experiments and density functional theory calculations of electronic states. It was concluded that weakly adsorbed ethylene and hydrogen are more reactive on the hydride surface than on the matrix surface with no absorbed hydrogen, leading to an increase in catalytic activity. In contrast, the hydride of Mg2Ni, Mg2NiH4, showed decreased activity toward the hydrogenation of ethylene, representing the direct opposite behavior to that for RENi5-xAlxalloys. We considered the reason for decline in catalytic activity of Mg2NiH4from the electronic states.