The microstructural changes occurring during the initial absorption of deuterium by virgin LaNi5 at 40°C have been investigated using in-situ neutron powder diffraction. Rietveld profile refinement was used to determine the α and β phase proportions, lattice parameters and microstrains. In absorption, we found that in the two-phase region (i) the lattice parameters of the α and β phases were (within resolution) independent of the phase proportions; (ii) the α-phase diffraction peaks remained essentially unbroadened relative to the virgin metal; (iii) the β-phase peaks were relatively broad with the usual anisotropy of breadth. These findings imply that, as nuclei of β phase form for the first time in a particle that is wholly α phase, the lattice expansion causes pure β crystallites containing a very high density of lattice defects to fracture off the particle, i.e., decrepitate. Hence the nanoscale mixing and strong mechanical interaction between the α and β phases noted in multiply cycled material are not observed during the initial absorption of D atoms, because the lattice parameter misfit cannot be accommodated. In desorption, and subsequently, there is sufficient accommodation of the lattice parameter mismatch between the α and β phases for them to coexist in the same powder particle.