Conversion‐type transition metal compounds are of great interest due to their intrinsically high theoretical capacities. However, extensive studies have revealed that many of these materials exhibit reversible capacities far exceeding theoretical values predicted by conventional conversion mechanisms. This widespread phenomenon of “excess capacity” suggests the involvement of additional charge storage processes beyond classical redox reactions. Among the proposed mechanisms, space charge storage has emerged as a compelling and generalizable model. It describes the formation of space charge layers at the interfaces between metallic nanoparticles and ionic compounds, where separated electrons and ions accumulate, enabling capacitive‐like charge storage, particularly at low voltages. This review provides a comprehensive summary of recent progress in understanding space charge storage, including thermodynamic modeling, indirect experimental evidence, and direct characterization techniques—in situ magnetic measurements. It further discusses design strategies to enhance space charge capacity in electrode materials. These insights offer a theoretical foundation and practical guidance for the rational design and performance optimization of high‐energy, fast‐charging, and long‐cycle energy storage systems.