Vanadium redox flow batteries (VRFBs) have attracted considerable attention for potential use in the development of large-scale energy storage systems. However, the commercialization of VRFBs is still challenging because of their various overpotentials, which are due to the poor reversibility and electrochemical activity of graphite felt (GF) electrodes. In this study, we fabricated a NiO-decorated GF electrode that exhibited a clear electrocatalytic effect on the V2+/V3+ and VO2+/VO2 + redox reactions. Vanadium ions preferentially attached to each NiO site because of strong electrostatic affinity to the local negatively charged O2− species. In particular, a significant amount of NiO bound to graphite by replacement of hydrogen from the hydroxyl groups with nickel ion, leading to an increase in the ratio of carboxyl groups to hydroxyl groups. The increase in the number of carboxyl groups also improved the VRFB performance, since the carboxyl functional group on GF surface acts as effective catalyst for the vanadium redox reactions. Furthermore, NiO nanoparticles enhanced the mass-transfer property of vanadium ions by the increased area and hydrophilicity of the electrode surface. To optimize the electrode structure for high electrochemical performance, the crystallinity and morphology of the NiO catalyst on GF were controlled via the operating temperature and precursor concentration. When optimized NiO/GF300 was applied to VRFBs, it exhibited high energy efficiency (74.5%) at a high current rate (125 mA cm−2), compared with GF without the catalyst (55.4%). Moreover, NiO-decorated GF exhibited durability and stability in acidic electrolyte during long-term operation for 300 cycles.