Nano-aluminium particles are produced through the wire explosion process in different gas medium. The particles produced by wire explosion process, in helium medium are of smaller size compared to argon/nitrogen medium. The nano aluminium powder on reaction with water forms oxides having bayerite and boehmite structure. It is observed that nano aluminium on reaction with KOH solution at room temperature it forms bayerite. The results of the study were confirmed through Wide Angle X-ray diffraction (WAXD) and by Transmission Electron Microscope (TEM) studies. The reaction of nano aluminium powder with KOH solution/water indicates that the rate of hydrogen generation is high when nano aluminium powder reacts with KOH solution than with water. The rate of hydrogen generation gets reduced drastically when the nano aluminium powder which is exposed to air medium for some period is used for reaction with KOH/Water. It is also observed that the rate of hydrogen generation is high with nano size aluminium particles compared with ultrafine particles. © 2010 FEI STU.