Strong metal−support interactions (SMSIs), characterized by the encapsulation of metal nanoparticles by the support oxide, have a significant impact on various heterogeneous catalytic reactions. In this study, we present our investigations on tuning the catalytic performance of CO 2 hydrogenation through regulating the SMSI in a Ni/Sm 2 O 3 catalyst. Our results demonstrate that the complete encapsulation of Ni nanoparticles with amorphous Sm 2 O 3 , achieved through H 2 reduction, leads to nearly full selectivity to CO. In contrast, with controlled in situ thermal postannealing in an H 2 /CO 2 /N 2 mixture, the encapsulated Sm 2 O 3 layer can be partially removed and crystallized, as revealed by atomic-resolution transmission electron microscopy analyses, which results in enhanced activity and a full selectivity toward CH 4 . In addition, the prolonged postannealing durations completely remove the Sm 2 O 3 overlayer, causing a decline in CO 2 methanation activity. These findings underscore the critical role of the SMSI effect in CO 2 hydrogenation activity and offer valuable insights for regulating SMSI to produce targeted value-added chemicals.