In this study, ultrasmall Ni nanoparticles (Ni NPs) were controllably supported in the cage-type mesopores of -COOH-functionalized mesoporous silica SBA-16 (denoted as Ni(x)@S16C, where x is the Ni loading) via wet impregnation under alkaline conditions, followed by thermal reduction. The particle sizes of the Ni NPs ranged from 2.7 to 4.7 nm, depending on the Ni loading. Under the appropriate alkaline conditions (i.e., pH 9) deprotonation of the carboxylic acid groups on the cage-type mesopore surfaces endowed the effective incorporation of Ni2+ precursors via favorable electrostatic interactions, and thus well-dispersed Ni NPs confined in the cage-type mesopores of SBA-16 were achieved. The combination of the cage-type mesopores and the surface functionality provided dual beneficial features to confine the immobilized Ni NPs and to tune their particle sizes. The remarkably enhanced catalytic activities of the Ni(x)@S16C materials for CO2 hydrogenation and CH4 formation were demonstrated. The cage-type SBA-16 support provided a positive effect for the Ni NPs to enrich the surface sites, which can strongly adsorb CO and CO2, thus leading to high catalytic rates for CO2 and CO hydrogenation. The reaction mechanism, catalytic kinetics, and active sites were investigated to correlate to the high reaction rate for CO2 hydrogenation to form CH4.