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In this study, severe cracking occurred during an investigation of the direct hot rolling of industrial electrolytic nickel plates. To determine the cause of hot-rolling cracking, the microstructure phase composition was analyzed through the utilization of various techniques, including optical microscopy, scanning electron microscopy, electron backscattering diffraction, transmission electron microscopy (TEM), energy-dispersive X-ray spectroscopy (EDS) and electron probe micro-analysis. The comparative microstructural analysis took place between specimens heat treated in atmospheric and vacuum environments. The characterization and analysis of the hot-rolled plates considered the crack microstructure and fracture morphology. It was shown that holes appeared along the large angular grain boundaries after annealing at 1100 °C for 8 h. Possible reason: In a high-temperature environment, the decomposition of residual additives in the electrolytic nickel releases oxidizing gases, which oxidizes the grain boundaries. The reaction with carbon diffused into the grain boundaries and produced carbon monoxide gas, which induced holes and severely reduced the grain boundary plasticity. The heat treatment time did not need to be very long for severe grain boundary degradation to occur. After severe cavitation, the electrolytic nickel was severely cracked at grain boundaries cracks due to a shear force, and brittle fractures occurred along grains with very low plasticity.