The development of low-cost, high-efficiency electrocatalysts is of primary importance for hydrogen energy technology. Noble metal-based catalysts have been extensively studied for decades; however, activity and durability issues still remain a challenge. In recent years, carbon shell-encapsulated metal (M@C) catalysts have drawn great attention as novel materials for water electrolysis and fuel cell applications. These electrochemical reactions are governed mainly by interfacial charge transfer between the core metal and the outer carbon shell, which alters the electronic structure of the catalyst surface. Furthermore, the rationally designed and fine-tuned carbon shell plays a very interesting role as a protective layer or molecular sieve layer to improve the performance and durability of energy conversion systems. Herein, we review recent advances in the use of M@C type nanocatalysts for extensive applications in fuel cells and water electrolysis with a focus on the structural design and electronic structure modulation of carbon shell-encapsulated metal/alloys. Finally, we highlight the current challenges and future perspectives of these catalytic materials and related technologies in this field.