Methane steam reforming (MSR) reaction is a mature industrial process that has been applied for large-scale hydrogen production. Here, we report the synthesis and characterization, reaction kinetics, and deactivation mechanism of a series of catalysts with metallic nickel (Ni) clusters and molybdenum carbide (Mo2C) particles supported on zeolite Y (Ni-Mo2C/FAU) in MSR reaction at 850 oC. Despite low Ni loading less than 2.4 wt%, MSR on Ni-Mo2C/FAU exhibits high activity and stability, yet deactivation of Ni-FAU (the sample without Mo2C) is significant. Further investigations elucidate that the catalyst deactivation is caused by Ni particle sintering via Ostwald ripening instead of coking, and steam induces hydroxylated Ni surface that accelerates sintering. Moreover, encapsulated Mo2C boosts the activity and stability of Ni on zeolite Y by enhancing CH4 activation rather than activating H2O. The interplays among Mo2C and Ni particles dynamically balance the carbon formation and consumption rates, and inhibit Ni sintering. This study enables insights into an alternative design principle of transition metal carbide – Ni catalysts with high activity and stability for effective MSR by tuning the compositional, structural, and interfacial factors.