In this work, a facile and environmentally friendly process was developed for synthesis of Ag/Ni(OH)₂ composites by only mixing an ethanol solution of AgNO₃ with Ni(OH)₂ at room temperature. The morphology and structure of the as-prepared Ag/Ni(OH)₂ composites were investigated by X-ray diffraction (XRD), field-emission scanning electron microscopy (FESEM), transmission electron microscopy (TEM), high resolution TEM (HRTEM) and X-ray photoelectron spectroscopy (XPS). It was found that the composites consist of ultrathin nickel hydroxide and silver nanoparticles (Ag NPs), the Ag NPs with an average diameter of around 4.7 nm evenly dispersed on the surface of Ni(OH)₂ nanosheets. The catalytic properties of the obtained Ag/Ni(OH)₂ composites were evaluated by the reduction of 4-nitrophenol (4-NP) using NaBH₄ as a reducing agent. The results revealed that the obtained Ag/Ni(OH)₂ composites exhibited an outstanding catalytic activity. In addition, the formation mechanism of Ag NPs was probed by ultraviolet-visible spectroscopy (UV-Vis). It was found that Ni(OH)₂ as a substrate played an important role in the formation of silver particles, which not only acted as a superior adsorbent of silver ion but also a source of OH⁻ that was able to accelerate the reaction. Electrochemical impedance spectroscopy (EIS) and fluorescence (FL) spectra were employed to indirectly elucidate the mechanism for reduction of 4-NP. The Ag/Ni(OH)₂ composites are very promising catalytic candidates for the reduction of 4-nitrophenol because of their easy and simple preparation route and high catalytic activity.