The role of catalysts in vanadium flow batteries (VFBs) has been studied by introducing bismuth (Bi) nanoparticles on carbon felt (CF) and graphite felt (GF). The electrocatalytic activity and VFBs performance of CF and GF before and after modification with Bi nanoparticles are investigated by cyclic voltammetry (CV), electrochemical impedance spectroscopy (EIS) and VFB single cell charge–discharge test. The results show that CF exhibits the much higher electrocatalytic activity than GF, due to its higher amount of C–OH and quaternary nitrogen groups and more defect sites. Bi nanoparticles can effectively improve the electrocatalytic activity of CF and GF, especially GF, towards V2+/V3+ redox couple in VFBs. As a result, energy efficiency of a VFB with GF electrodes can be improved significantly by modification with Bi due to the dramatically reduced electrochemical polarization. However, the energy efficiency of a VFB with CF electrodes rarely changes after introduction of Bi nanoparticles, due to the fact that dominant limitation in a VFB with CF electrodes is ohmic polarization, and the reduced charge transfer resistance is not enough to improve the performance of this VFB remarkably. Therefore, CF is a more suitable electrode material for commercialized VFBs due to its higher electrocatalytic activity and lower cost.