Renewable-driven electrocatalytic nitrate conversion offers a promising alternative to alleviate nitrate pollution and simultaneously harvest green ammonia. However, due to the complex proton-electron transfer processes, the reaction mechanism remains elusive, thereby limiting energy efficiency. Here, we adopt Ni(OH)₂ as a model catalyst to investigate the dynamic evolution of the reaction interface. A proposed OH cycle mechanism involves the formation of a locally OH-enriched microenvironment to promote the hydrogenation process, which is identified through in-situ spectroscopy and isotopic labelling. By further activating the dynamic state through the implementation of surface vacancies via plasma, we achieve a high Faradaic efficiency of almost 100%. The activated interface accelerates the OH cycle by enhancing dehydroxylation, water dissociation, and OH adsorption, thereby promoting nitrate electroreduction and inhibiting hydrogen evolution. We anticipate that rational activation of the dynamic interfacial state can facilitate electrocatalytic interface activity and improve reaction efficiency.