Metal single‐atom and internal structural defects typically coexist in M–N–C materials obtained through the existing basic pyrolysis processes. Identifying a correlation between them to understand the structure–activity relationship and achieve efficient catalytic performance is important, particularly for the rare‐earth (RE) elements with rich electron orbitals and strong coordination capabilities. Herein, a novel single‐atom catalyst based on the RE element lutetium is successfully synthesized on a N–C support. Structural and simulation analyses demonstrate that the formation of a LuN6 structural site with an individual defect because of pyrolysis is thermodynamically favorable in Lu–N–C. Using KHCO3‐based electrolytes facilitates the fall of the K+ cations into the defective sites of Lu–N–C, thus enabling improved CO2 capture and activation, which increases the catalyst conductivity for Lu–N–C. In this study, the catalyst exhibits a Faradaic efficiency of 95.1% for CO at a current density of 18.2 mA cm−2 during carbon dioxide reduction reaction. This study thus provides new insights into understanding RE–N–C materials for energy utilization.