Tellurium (Te) is a high-volumetric-capacity and high-rate electrode material for potassium-ion (K+) storage. However, there is a lack of knowledge about the nanostructure design of electrode and detailed redox process of tellurium. Herein, we fabricated subnano-sized (<1 nm) tellurium encapsulated into nitrogen, phosphorus-codoped porous carbon nanofibers (Te@N,P-codoped PCNFs). Single-atom and small-molecule tellurium allotropes can be first identified within hierarchical porous carbon through the space confinement of micropores and the chemical bonding effect. A multi-step transformation process for K+ storage is disclosed by experimental and theoretical approaches, where tellurium is firstly converted into K2Ten (n = 5 ∼ 7), then reduced to K2Te3/K2Te2, and eventually transformed into K2Te. Importantly, heteroatoms codoping facilitates tellurium immobilization and K2Te adsorption to avoid their detachment from electrode, and meanwhile, the space confinement of micropores effectively alleviates the volume change. This well-designed electrode exhibits high capacity of 2023.13 mAh cm−3 after 700 cycles at 0.5 C and superior cycling performance for 1500 cycles at 5.0 C, which endows graphite cathode-based dual-ion batteries with good cyclability and high energy density of 191.6 Wh kg−1 (based on the total mass of the anode and cathode). Our work demonstrates the feasibility of atomically dispersed tellurium through the structure engineering, and provides new insights for the manipulation of tellurium chemistry.