Abstract Transition metal oxide electrocatalysts (TMOEs) are poised to revive grid‐scale all‐vanadium redox flow batteries (VRFBs) due to their low‐cost and unique electronic properties, while often inescapably harboring surface vacancies. The role of local vacancy‐induced physicochemical properties on vanadium‐redox electrochemistry (VRE), encompassing kinetics, and stability, remains profoundly unveiled. Herein, for the first time, it is revealed that vacancies induce atomic‐scale polarization in TMOEs and elucidate its mechanism in VRE. Attributable to local polarization, particularly by cation vacancy, the activated nearest‐coordinated Mn sites prominently augment the adsorption competence of the V 2+ /V 3+ couple and expedite its round‐tripping by forming an intermediate *Mn–O–V bridge. It is also affirmed that the anion vacancies are vulnerable to microstructure reconfiguration by feeble hydroxyl adsorption and thus performance degradation over long‐term cycling, in contrast to cation vacancies. Accordingly, the VRFB employing cation‐vacancy‐functionalized electrode delivers an energy efficiency of 80.8% and a reliable 1000‐cycle lifespan with a negligible decay of 0.57% per cycle at 300 mA cm −2 , outclassing others. The findings shed light on the fundamental rules governing the utility and evolution of vacancies in TMOEs, thereby moving a step closer toward their deployment in a wide range of sustainable energy storage schemes.