It is well-known that the stress-induced rotation of the magnetic domains in nickel gives rise to an internal friction peak (when internal friction is plotted as a function of temperature of measurement). An internal friction peak associated with the presence of carbon in nickel was recently observed in our laboratory. In this paper are described further experiments which demonstrate conclusively that this new internal friction peak is not connected with ferromagnetism of nickel but depends upon the amount of carbon in solid solution in nickel. More accurate determinations of the activation energy associated with this internal friction peak show that this activation energy is indeed very close to the activation energy for the diffusion of carbon in nickel. These experiments thus show that the new internal friction peak is associated with the stress-induced micro-diffusion of carbon in nickel.A brief discussion on the mechanism of this internal friction peak in terms of the existence of holes in the crystal lattice of nickel is given.