Carbon nanofibers (CNFs) were catalytically grown on Ni foam by decomposing ethylene in the presence of hydrogen. Variation of hydrogen concentration during CNF growth resulted in significant manipulation of the properties of a thin layer of CNFs. Addition of hydrogen retards carbon deposition and increases the surface area of the CNF layer because of formation of thinner fibers. The thickness of CNF layer shows an optimum at intermediate hydrogen concentrations. These effects contribute to the competitive adsorption of hydrogen and ethylene, influencing the availability of carbon on the Ni surface, which is necessary for both the formation of small Ni particles by fragmentation of polycrystalline Ni, as well as for CNF growth after formation of small particles. Furthermore, decreasing the carbon supply via adding hydrogen also delays deactivation by encapsulation of Ni particles. The thickness of the micro-porous C-layer between the Ni surface and the CNF layer decreases with hydrogen addition, at the expense of a slight loss in the attachment of the CNFs to the foam, supporting the proposition that CNFs are attached by roots in the C-layer. The addition of hydrogen after the initial CNF formation in ethylene only causes fragmentation of the C-layer, inducing significant loss of CNFs.