Bismuth telluride (Bi2Te3) nanomaterials have attracted considerable attention owing to their intriguing physicochemical properties and wide-ranging potential applications arising from their distinctive layered structure and nanoscale size effects. However, synthesizing sub-100 nm ultra-small Bi2Te3 nanocrystals remains a formidable challenge. To date, there has been little investigation on the performance of these ultra-small Bi2Te3 nanocrystals in sodium-ion batteries (SIBs). This study presents a general strategy for synthesizing ultra-small Bi2Te3 nanocrystals on reduced graphene oxide (Bi2Te3/rGO) through a nanoconfinement approach. First-principles calculations and electrochemical kinetic studies confirm that the ultra-small Bi2Te3/rGO composite material can effectively mitigate volumetric expansion, preserve electrode integrity, and enhance electron transfer, Na-ion adsorption, and diffusion capacity. As a result, the Bi2Te3/rGO electrode demonstrates a remarkable initial specific capacity of 521 mA h g-1 at 0.1 A g-1, showcasing outstanding rate behaviour and long-lasting cycle life exceeding 800 cycles at 1 A g-1 while preserving exceptional rate properties. The function of the battery is indicated by ex situ TEM and XPS findings, which propose a conventional dual mechanism involving conversion and alloying. This work paves the way for rapid advancements in Bi2Te3-based SIB anodes while contributing to our understanding of sodium ion storage mechanisms.