Zinc–iodine (Zn–I2) batteries attract increasing attention for inherent safety and cost-effectiveness. However, challenges like sluggish iodine kinetics and polyiodide shuttle effect seriously impede their practical viability. Herein, we develop a diffusion-retarded strategy, where carbon cage-encapsulated Cu-doped ZnO nanoparticles are tailored on scalable carbon paper substrates as iodine cathodes to simultaneously retard polyiodide shuttle effect and accelerate iodine species reaction kinetics. Specifically, the physical barrier formed by carbon cage and porous fiber effectively retards the diffusion of polyiodides, while the intermodulated single-atom Cu sites and adjacent Zn sites in Cu–ZnO nanoparticles show remarkable catalytic activity and chemisorption for iodine species, respectively. Hence, the obtained Zn–I2 batteries exhibit an ultra-low polarization voltage of 26.7 mV (1 A g−1) and endure an ultra-long cycle life over 40 000 cycles at 5 A g−1. Notably, the batteries maintain over 5000 cycles with a capacity degradation rate of barely 0.007% per cycle at 60 °C, while the capacity decline is 20.8 mAh g−1 under −20 °C (vs. 25 °C), as well as over 1150 cycles at a negative/positive (N/P) ratio of 2.5. Overall, high-performance Zn–I2 batteries under harsh conditions through the diffusion-retarded strategy provide valuable guidance for rational cathode designs toward practical Zn–I2 battery systems.