Abstract The efficient generation of methane by total electroreduction of carbon monoxide (CO) could be of benefit for a more sustainable society. However, a highly efficient and selective catalyst for this process remains to be developed. In this study, density functional theory calculations indicate that steric hindrance in monolayer molybdenum sulfide with 2 S vacancies (DV‐MoS 2 ) can facilitate the conversion of CO into CH 4 with high activity and selectivity under electrochemical reduction at a low potential of −0.53 V vs. RHE and ambient conditions. The potential is a significant improvement on the state‐of‐the‐art Cu electrode (−0.74 V vs. RHE), with less electrical energy. Moreover, the results suggest that such steric hindrance effects are important for structure‐sensitive catalytic reactions.