<p>Oxygen-involved dry reforming of methane (ODRM) offers a sustainable route for valorizing CO₂ streams containing O₂, while simultaneously allowing for the regulation of the H₂/CO ratio and achieving self-compensation of heat. However, its efficiency is hampered by the competitive reaction of O₂, which suppresses CO₂ conversion, particularly at low temperatures. Herein, we report an atomically dispersed NiFe alloy catalyst (NiFe_SAA/CeO₂) for efficient CO₂ conversion in ODRM with a CO₂/O₂ ratio of 2:1, which shows 69% of CH₄ conversion and 65% of CO₂ conversion and no obvious carbon deposition at 600 °C during the long-term testing. <i>In situ</i> characterizations and theoretical calculations determined that Fe atoms are atomically embedded into the Ni lattice, which effectively modulates the electronic state of Ni and the metal-support interaction. The presence of this active species results in moderate CO₂ adsorption and weakened C–O bonds of stable carbonate species in the presence of O₂, accelerating the conversion of CO₂. The electronic bonding Ni-Fe single-atom alloy inhibits excessive interactions between Ni and CeO₂ and promotes the selective oxidation of CH₄ to CH_<i>x</i>O* intermediates, thereby avoiding methane deep cracking and Ni oxidation, contributing to the superior catalytic stability. This work provides a strategy for constructing atomically dispersed alloys to decouple and regulate the competitive adsorption/activation of multiple reactants, offering a promising route for the direct and efficient conversion of industrial CO₂-containing feeds without costly purification.</p>