Developing efficient electrocatalysts with low‐cost for the urea oxidation reaction (UOR) is a significant challenge in energy‐saving H2 production owing to its lower thermodynamic potential. Heteroatom incorporation strategy has been proven to boost electrocatalytic activity by altering electronic structures and revealing more active sites on catalysts. Herein, nickel hydroxide nanosheets with various vanadium incorporation (Vx‐Ni(OH)2) were developed through a facile hydrothermal approach. By optimizing the incorporated vanadium contents, V6‐Ni(OH)2 catalyst exhibited easily accessible active sites and enhanced charge transfer with structural advantages, then assembled as the working electrode for urea‐assisted H2 production. Consequently, V6‐Ni(OH)2 catalyst demonstrated superior UOR activity compared with other incorporated samples with an overpotential of 1.33 V and a Tafel slope of 28.3 mV dec−1. Theoretical calculations revealed that the improved UOR activity was attributed to the potential determining step of V‐Ni(OH)2, which exhibited lower energy in comparison with the pristine Ni(OH)2 and increased electronic states density near the Fermi level. Both experimental and theoretical calculations confirmed vanadium incorporation on Ni(OH)2 could modify the electronic structure of Ni(III) species, improving electrical conductivity, and optimizing the adsorption energy for key reaction intermediates. Furthermore, the crucial contribution of vanadium incorporation with optimized electronic structures to the high UOR activity of Ni(OH)2 is demonstrated.image