A stress analysis of formed bed of micro-encapsulated hydrogen-absorbing alloy (MHA) is performed by using a finite element method (FEM). MHA has been developed in order to enhance the thermal conductivity of metal hydride bed and prevent the metal hydride powder from powdering. MHA bed expands / contracts during hydriding / dehydriding process. The reactor may be damaged by the stress caused by this expansion and contraction of MHA formed bed. In order to optimize the response and efficiency of energy storage and conversion system considering the stress behavior, it is necessary to know MHA formed bed behavior in the vessel. MHA (copper plated LaNi5) formed bed in a container of the hollow cylinder heat exchanger is investigated by a mathematical model. An analytical field is assumed to be an elastic body, includes the expansion / contraction phenomena, and is formulated by incremental theory. Hydriding / dehydriding rate of MHA is calculated by our previous reaction rate expression. The calculation is carried out in the case with and without wall friction. As a result, following conclusions are obtained: 1) Since hydriding / dehydriding reaction of MHA bed occurs from surface to inside of the bed, tensile and compression stress is observed at the surface and inside of the bed, respectively. 2) The inner and outer wall friction cause the other side deformation. 3) In the upstream side of the bed, the hydriding reaction occurs faster than inside of the bed. It causes the heat exchanger wall deformation.