The heterogeneous catalytic conversion of carbon dioxide (CO2) to methane (CH4) via CO2 methanation offers a promising avenue for establishing the closed carbon loop. Nevertheless, the lack of effective catalysts limits its industrial applications. Considering this, we developed a novel heterogeneous catalyst comprising oxygen vacancies enriched atomic Fe-oxide clusters confined in the TiO2-supported Ni-hydroxide (denoted as NiFe-TiO2) via wet chemical reduction method. This material delivers an unprecedently high CH4 productivity of ∼24,358 mmol g-1h−1 in CO2 methanation at 300 °C, surpassing the Ni-TiO2 (12,481 mmol g-1h−1) by ∼ 95 %. On top of that, the high structural reliability of the Fe-oxide atomic clusters endows the NiFe-TiO2 catalyst with outstanding durability, where it achieves an optimum CH4 productivity of ∼ 36,399 mmol g-1h−1 after 116 cycles (155 h) with CH4 selectivity of 90.5 % and retains the pristine performance up to 220 cycles (330 h) in the stability test. With evidence from in-situ X-ray absorption and ambient pressure X-ray photoelectron spectroscopy studies, the performance descriptors and reaction pathways were unveiled, where the oxygen vacancies in the atomic Fe-oxide clusters and the adjacent Ni-hydroxide domains synergistically boost the CO2 activation and the H2 dissociation, respectively. Such a potential synergy enables the simultaneous operation of all intermediate steps for enhanced CO2 methanation kinetics on the NiFe-TiO2 surface. Most importantly, these findings not only unravel the merits of oxygen vacancies in transition metals for CO2 methanation but mark a step ahead for the rational design of heterogeneous catalysts in various catalytic applications.