Rational designing of efficient nanocatalysts plays a crucial role in catalyzing kinetically sluggish reactions like Oxygen Evolution Reaction (OER). However, the uncontrolled nucleation and growth of nanostructures poses major effectiveness and economic challenges in the implementation and commercialization of noble metal-based electrocatalysts. Functionalized Metal-Organic Frameworks (MOFs) have the properties to stabilize such unstable nanoclusters in extremely small sizes by compensating for their high surface energy and Ostwald’s ripening effect. Here, we have reported the synthesis of ultrasmall Ruthenium nanoclusters stabilized through thiol-functionalized Ni-MOF (Ru@Ni-M-SH). The stabilization of ruthenium under reduced conditions on the MOF surface was facilitated by the lower electronegativity and increased orbital overlapping effect of sulfur, resulting in an average size of 1.5 nm. A perturbed electronic structure confirmed from XPS as well as XAS studies revealed the fundamental understanding behind electronic redistribution. Backed with such a favorable electronic structure, the catalytic OER activity for Ru@Ni-M-SH outperformed the state-of-the-art RuO2 with three times higher current density (242 mA/cm2) and 143 mV reduced overpotential. With 95% Faradaic efficiency, the Turnover Frequency (TOF) and Mass activity of Ru@Ni-M-SH were found to be several orders higher as compared to RuO2. Unlike other Ru-based catalysts, Ru@Ni-M-SH showed extremely high stability with over 24 h of chronoamperometry study. With thorough in-situ analysis providing information regarding catalytically active sites and intermediates, Ru@Ni-M-SH established itself as an economically sustainable OER electrocatalyst.