Vanadyl phosphate (VOPO4) is extensively studied as a cathode material for aqueous zinc‐ion batteries (AZIBs). However, due to sluggish ion migration and low electrical conductivity, VOPO4 typically exhibits moderate specific capacity below 200 mAh g−1. To address these issues, an iodine (I2)‐mediated etching method is proposed to enhance the electrochemical performance of VOPO4 for AZIBs. This method effectively regulates structural defects in VOPO4. Initially, I2 undergoes a disproportionation reaction with interlayer H2O in VOPO4, inducing crystal defects in the nanosheet structure. Additionally, the generated HI reduces V5+, further introducing oxygen vacancies in VOPO4. Both experimental and computational results indicate that moderate structural defects in VOPO4 can synergistically improve the electron transfer and ion diffusion kinetics of the electrode. However, excessive structural defects lead to crystalline amorphization and structural pulverization of VOPO4, impeding Zn2+ migration within the material. Therefore, the iodine‐mediated etched VOPO4 electrode (VOP‐I4) exhibits a high specific capacity of 249 mAh g−1 at a current density of 0.2 A g−1 and a large energy density of 300 Wh kg−1 at a power density of 246.2 W kg−1, outperforming most reported VOPO4‐based materials for AZIBs. This study provides a new avenue for developing high‐performance VOPO4 materials for energy storage applications.