β-Ni(OH)2/ZnO composite powders were successfully synthesized by hydrothermal method at 180 °C for 15 h whereas NiO/ZnO composite powders formed after the as-prepared powders were calcined at 800 °C for 1 h in air. The X-ray diffractometer (XRD), scanning electron microscope (SEM), UV-Vis spectrophotometer were used to characterize the phase, particle shape as well as size and optical properties, respectively. In this system, it was found that ZnO is a major phase while β-Ni(OH)2 and NiO are a minor phases. The altered particle shape of ZnO was influenced by addition of Ni(CH3COO)2 6H2O whereas the particle shape of the minor phase was changed due to the calcination process. The optical band gap decreased when the amount of minor phase increased. For photocatalytic study, it was found that 6 mol% β-Ni(OH)2/ZnO composite powders exhibited the best decolorization of methylene blue aqueous solution.