Electroless nickel plating is a suitable technology for the hydrogen industry because electroless nickel can be mass-produced at a low cost. Investigating in a complex environment where hydrogen permeation and friction/wear work simultaneously is necessary to apply it to hydrogen valves for hydrogen fuel cell vehicles. In this research, the effects of hydrogen permeation on the mechanical characteristics of electroless nickel-plated free-cutting steel (SUM 24L) were investigated. Due to the inherent characteristics of electroless nickel plating, the damage (cracks and delamination of grain) and micro-particles by hydrogen permeation were clearly observed at the grain boundaries and triple junctions. In particular, the cracks grew from grain boundary toward the intergranualr. This is because the grain boundaries and triple junctions are hydrogen permeation pathways and increasing area of the hydrogen partial pressure. As a result, its surface roughness increased by a maximum of two times, and its hardness and adhesion strength decreased by hydrogen permeation. In particular, hydrogen permeation increased the friction coefficient of the electroless nickel-plated layer, and the damage caused by adhesive wear was significantly greater, increasing the wear depth by up to 5.7 times. This is believed to be due to the decreasing in wear resistance of the electroless nickel plating layer damaged by hydrogen permeation. Nevertheless, the Vickers hardness and the friction coefficient of the electroless nickel plating layer were improved by about 3 and 5.6 times, respectively, compared with those of the free-cutting steel. In particular, the electroless nickel-plated specimens with hydrogen embrittlement exhibited significantly better mechanical characteristics and wear resistance than the free-cutting steel.