As a prototypical photocatalyst, TiO2 has been extensively studied. An interesting yet puzzling experimental fact was that P25—a mixture of anatase and rutile TiO2— outperforms the individual phases; the origin of this mysterious fact, however, remains elusive. Employing rigorous first-principles calculations, here we uncover a metastable intermediate structure (MIS), which is formed due to confinement at the anatase/rutile interface. The MIS has a high conduction-band minimum level and thus substantially enhances the overpotential of the hydrogen evolution reaction. Also, the corresponding band alignment at the interface leads to efficient separation of electrons and holes. The interfacial confinement additionally creates a wide distribution of the band gap in the vicinity of the interface, which in turn improves optical absorption. These factors all contribute to the enhanced photocatalytic efficiency in P25. Our insights provide a rationale to the puzzling superior photocatalytic performance of P25 and enable a strategy to achieve highly efficient photocatalysis via interface engineering.