The state of Nb-contained catalysts in MgH2 nanocomposites was investigated during the full cycle. X-ray diffraction (XRD) results showed that Nb2O5 and Nb reacted with MgH2 during ball-milling, forming NbH2 and NbH, respectively. In the following dehydrogenation, the (di)hydride decomposed, and Nb was produced. Then NbH was generated in both samples after rehydrogenation. Similar composition in both samples suggests that the catalytic effect follows the same mechanism, the Nb-gateway model, in which Nb facilitates the hydrogen transportation from MgH2 to the outside. By contrast, NbO remained during the full cycle. Scanning and transmission electron microscopy (SEM and TEM) observations revealed that the Nb2O5-doped sample tended to be refined in size, compared to the Nb-doped and NbO-doped ones. Nb crystals in the Nb2O5-doped sample were observed to be highly dispersed in the sample, with 10–20 nm in size. Given all that, tiny Nb crystals distributed in the composites worked as the gateway facilitating hydrogen transportation and improving dehydrogenation properties.