Hydrogenation-induced metal-semiconductor transitions usually occur in simple systems based on rare earths and/or magnesium, accompanied by major reconstructions of the metal host (atom shifts >2  Å). We report on the first such transition in a quaternary system based on a transition element. Metallic LaMg2Ni absorbs hydrogen near ambient conditions, forming the nonmetallic hydride LaMg2NiH7 which has a nearly unchanged metal host structure (atom shifts <0.7  Å). The transition is induced by a charge transfer of conduction electrons into tetrahedral [NiH4]4− complexes having closed-shell electron configurations.