Thermal decomposition of metal-organic framework (MOF) precursors is a recent method to create well-dispersed metal centers within active catalyst materials with enhanced stability, as required for dynamic operation conditions in light of challenges caused by the renewable energy supply. Here, we use a hard X-ray-based toolbox of pair distribution function (PDF) and X-ray absorption spectroscopy (XAS) analysis combined with X-ray diffraction and catalytic activity tests to investigate structure-activity correlations of methanation catalysts obtained by thermal decomposition of a Ni(BDC)(PNO) MOF precursor. Increasing the decomposition temperature from 350 to 500 °C resulted in Nifcc nanoparticles with increasing particle sizes, alongside a decrease in Ni2+ species and strain-induced peak broadening. For lower temperatures and inert atmosphere, Ni3C and NiO phases co-existed. A graphitic shell stabilized the Ni particles. Compared to an inert atmosphere, reducing conditions led to larger particles and a faster decomposition of the MOF precursor. Catalytic studies revealed that the decomposition at an intermediate temperature of 375 °C in 5% H2/He is the best set of parameters to obtain high specific surface areas while maintaining particle sizes that feature many active Ni centers for the formation of CH4.