Abstract Lithium‐ion microbatteries (LIMBs) face challenges in achieving high power density without compromising energy density, due to limitations in assembly and kinetics. By overcoming LIMB electrode fabricated using a laser‐assisted method, which significantly improves assembly precision and enhances reaction kinetics, the first anodization of Cu(OH) 2 ‐CuO nanoneedle hybrids on Cu foil for a LIB anode is reported. By resolving the limitations of previous metal‐hydroxide electrodes associated with conventional conversion reactions, the novel anode achieves an unprecedently‐high initial capacity of 3065 mAh g −1 which clearly exceeds the theoretical limit. X‐ray Photoelectron Spectroscopy, Transmission Electron Microscopy, and in‐situ Raman analysis revealed the nanoscale Cu‐particles and LiOH in high‐voltage reactions, alongside Cu x H y , Li 2 O, and LiH in low‐voltage hydride reactions. AIMD simulations additionally revealed the underlying atomistic mechanism. An in‐plane LIMB using a laser‐assisted method is further engineered, featuring in prelithiated Cu(OH) 2 ‐CuO as the anode and LiNi 0.8 Mn 0.1 Co 0.1 O 2 as the cathode. This LIMB operates between 2.0 and 4.5 V, delivering a reversible capacity of 6.61 mAh cm −2 at 20 µA cm −2 and retaining over 83% capacity after 500 cycles. This work advances overall understanding of lithium storage and offers key insights for the design of next‐generation LIMBs.