AbstractDeveloping efficient, low‐cost electrocatalysts for industrial‐level hydrogen production remains a significant challenge. Here lattice‐distorted Ni nanoparticles (NPs) encapsulated within a nitrogen‐doped carbon shell on delignified wood carbon (Ni‐NC@DWC) are constructed through a chitosan‐induced assembly and the pyrolysis process. Experimental and theoretical results indicate that the lattice distortion due to strong metal‐support interactions, boosts electron transfer and reaction intermediate adsorption/desorption, enhancing both the urea oxidation reaction (UOR) and hydrogen evolution reaction (HER). Interestingly, the active center Ni3+‐O is dynamically cyclically generated during the UOR. When utilized as a self‐standing electrode in an alkaline electrolyte, the Ni‐NC@DWC exhibits low potentials of 24 mV and 1.244 V at 100 mA cm−2 for HER and UOR, respectively. Moreover, the Ni‐NC@DWC achieves an ultrasmall cell voltage of 1.13 V at 100 mA cm−2 for urea‐assisted water splitting and can operate stably over 1000 h. Furthermore, when it is self‐assembled as an anion exchange membrane (AEM) electrolyzer, it requires only 1.62 V at 2000 mA cm−2 for industrial urea‐assisted water splitting and operates stably for 150 h without degradation, confirming that it is highly attractive for economical, sustainable, and scalable hydrogen production.