A bench-scale batch reactor was used to study the polymerization of butadiene with nickel(II) stearate Et2AlCl catalyst. In particular, the effects of moisture on polymerization were investigated. The initiation reaction is sensitive to temperature. At 0°C an induction period was observed, but at room temperature initiation can be assumed instantaneous. Water enhances catalytic reactivity, however at water concentrations greater than 10 mmol/L, termination reactions become significant. Maximum conversion is obtained in the 6 to 15 mmol/L range of water. The determining step for the molecular weight of polymer is the chain transfer to monomer. At low H2O concentration the molecular weight increases with water concentration, however it becomes independent of water concentration at high moisture content. With the help of statistical analysis of the experimental data, a two-active-species model was developed to describe the kinetics of the system and to explain certain polymerization characteristics.