As green chemistry, aqueous-phase reactions play a vital role in modern fine chemical synthesis. Herein, an encapsulated nickel in a hollow carbon sphere (Ni@HCS) catalyst was constructed to effectively catalyze an aqueous-phase hydrogenation-rearrangement tandem (AP-HRT) reaction, in which water was employed as the solvent and reactant simultaneously. The activity is relevant to the HCS and Ni loading. The optimal Ni@HCS catalyst can release 100% furfural conversion and 99.1% cyclopentanone selectivity at 150 °C and can maintain its activity after 10 cycles of experiments. The superior catalytic performance comes from the fact that each independent Ni@HCS can be treated as an individual nanoreactor with a void-confinement effect, which not only reduces the side reactions due to the size-selective effect but also prevents active metal from leaching under harsh conditions. The reaction mechanism of FAL AP-HRT was further investigated via kinetic experiments combined with DFT calculations.