There is an increasing demand in the flexible electronics industry for highly robust flexible/transparent conductors that can withstand high temperatures and corrosive environments. In this work, outstanding thermal and ambient stability is demonstrated for a highly transparent Ag nanowire electrode with a low electrical resistivity, by encapsulating it with an ultra-thin Al2O3 film (around 5.3 nm) via low-temperature (100 °C) atomic layer deposition. The Al2O3-encapsulated Ag nanowire (Al2O3/Ag) electrodes are stable even after annealing at 380 °C for 100 min and maintain their electrical and optical properties. The Al2O3 encapsulation layer also effectively blocks the permeation of H2O molecules and thereby enhances the ambient stability to greater than 1,080 h in an atmosphere with a relative humidity of 85% at 85 °C. Results from the cyclic bending test of up to 500,000 cycles (under an effective strain of 2.5%) confirm that the Al2O3/Ag nanowire electrode has a superior mechanical reliability to that of the conventional indium tin oxide film electrode. Moreover, the Al2O3 encapsulation significantly improves the mechanical durability of the Ag nanowire electrode, as confirmed by performing wiping tests using isopropyl alcohol.