Recently, metal‐based atomically thin materials (M‐ATMs) have experienced rapid development due to their large specific surface areas, abundant electrochemically accessible sites, attractive surface chemistry, and strong in‐plane chemical bonds. These characteristics make them highly desirable for energy‐related conversion reactions. However, the insufficient active sites and slow reaction kinetics leading to unsatisfactory electrocatalytic performance limited their commercial application. To address these issues, defect engineering of M‐ATMs has emerged to increase the active sites, modify the electronic structure, and enhance the catalytic reactivity and stability. This review provides a comprehensive summary of defect engineering strategies for M‐ATM nanostructures, including vacancy creation, heteroatom doping, amorphous phase/grain boundary generation, and heterointerface construction. Introducing recent advancements in the application of M‐ATMs in electrochemical small molecule conversion reactions (e.g., hydrogen, oxygen, carbon dioxide, nitrogen, and sulfur), which can contribute to a circular economy by recycling molecules like H2, O2, CO2, N2, and S. Furthermore, a crucial link between the reconstruction of atomic‐level structure and catalytic activity via analyzing the dynamic evolution of M‐ATMs during the reaction process is established. The review also outlines the challenges and prospects associated with M‐ATM‐based catalysts to inspire further research efforts in developing high‐performance M‐ATMs.