The invention relates to hydrogen storage alloy for a nickel-metal hydride battery and a manufacturing method of the hydrogen storage alloy. The chemical formula of the hydrogen storage alloy is La1-x-yCexReyNi4.83-a-b-cCoaMnbAlcMd, x, y, a, b and c in the formula are atomic ratios, and the ranges of x, y, a, b and c satisfy the conditions that x=(0.175, 0.20, 0.30 and 0.35), y=(0.015, 0.02, 0.03 and 0.05), a=(0.15, 0.18, 0.20 and 0.25), b=(0.36, 0.42, 0.54 and 0.85), c=(0.15, 0.18 and 0.21), d=(0.25, 0.45 and 0.56), 0.19<=x+y<=0.4, and 0.9<=a+b+c+d<=1.4, wherein Re is one of Y, Zr and Gd, and M is at least one of Fe, Cr and Si. In the manufacturing process, gas and impurities in the alloy are removed in a film forming manner, raw materials are fully alloyed, annealing treatment is used as assistance, the composition segregation of the alloy can be remarkably reduced, and lattice imperfection and lattice stress are eliminated. The hydrogen storage alloy manufactured through the method has the beneficial effects of being high in discharge capacity and anti-pulverization capacity, low in production cost and the like, and the requirements of the Ni-MH battery for production cost and the performance can be met.