Transition metal phosphides (TMPs) have recently been utilized as promising electrocatalysts for oxygen evolution reaction (OER) in alkaline media. The metal oxides or hydroxides formed on their surface during the OER process are hypothesized to play an important role. However, their exact role is yet to be elucidated. Here unambiguous justification regarding the active role of oxo(hydroxo) species on O‐Ni_(1−x)Fe_xP₂ nanosheet with pyrite structure is shown. These O‐Ni_(1−x)Fe_xP₂ (x = 0.25) nanosheets demonstrate greatly improved OER performance than their corresponding hydroxide and oxide counterparts do. From density function theory (DFT) calculations, it is found that the introduction of iron into the pyrite‐phased NiP₂ alters OER steps occurred on the surface. Notably, the partially oxidized surface of O‐Ni_(1−x)Fe_xP₂ nanosheets is vital to improve the local environment and accelerate the reaction steps. This study sheds light on the OER mechanism of the 3d TMP electrocatalyst and opens up a way to develop efficient and low‐cost electrocatalysts.