Two types of nanosized niobium oxides and their composites, pseudohexagonal Nb2O5 (TT-Nb2O5), monoclinic NbO2 (M-NbO2), and the coexistence of TT-Nb2O5 and M-NbO2 (TT-Nb2O5/M-NbO2), are successfully synthesized through the urea-metal chloride route, and they exhibit excellent catalytic activity and photovoltaic performance in dye-sensitized solar cells (DSSCs). First-principles density function theory (DFT) calculations show that their catalytic activity is significantly influenced by their intrinsic electronic structures and properties. The lone-pair 4d(1) electrons of Nb4+ in M-NbO2 enhance the Nb-I interaction and promote electron transfer from the M-NbO2 counter electrode (CE) to I, thus resulting in superior catalytic properties in M-NbO2-based DSSCs. In addition, the adsorption energy of I on the M-NbO2 surface is in the optimal energy range of 0.3-1.2 eV, and the Fermi level of M-NbO2 is 0.6 eV, which is higher than the I-3(-) reduction reaction potential, and I-3(-) can be spontaneously reduced to 3I(-). Herein, a general strategy for understanding the electronic structures and catalytic activities of transition metal compounds as CE catalysts for DSSCs is provided.