Atomic hydrogen exists ubiquitously in graphene materials made by chemical methods. Yet determining the effect of hydrogen on the electrochemical performance of graphene remains a significant challenge. Here we report the experimental observations of high rate capacity in hydrogen-treated 3-dimensional (3D) graphene nanofoam electrodes for lithium ion batteries. Structural and electronic characterization suggests that defect sites and hydrogen play synergistic roles in disrupting sp(2) graphene to facilitate fast lithium transport and reversible surface binding, as evidenced by the fast charge-transfer kinetics and increased capacitive contribution in hydrogen-treated 3D graphene. In concert with experiments, multiscale calculations reveal that defect complexes in graphene are prerequisite for low-temperature hydrogenation, and that the hydrogenation of defective or functionalized sites at strained domain boundaries plays a beneficial role in improving rate capacity by opening gaps to facilitate easier Li penetration. Additional reversible capacity is provided by enhanced lithium binding near hydrogen-terminated edge sites. These findings provide qualitative insights in helping the design of graphene-based materials for high-power electrodes.