A graphite felt decorated with bismuth nanoparticles was studied as negative electrode in a vanadium redox flow battery (VRFB). The results confirm the excellent electrochemical performance of the bismuth modified electrode in terms of the reversibility of the V3+/V2+ redox reactions and its long-term cycling performance. Moreover a mechanism that explains the role that Bi nanoparticles play in the redox reactions in this negative half-cell is proposed. Bi nanoparticles favor the formation of BiHx, an intermediate that reduces V3+ to V2+ and, therefore, inhibits the competitive irreversible reaction of hydrogen formation (responsible for the commonly observed loss of Coulombic efficiency of VRFBs). Thus, the total charge consumed during the cathodic sweep in this electrode is used to reduce V3+ to V2+, resulting in a highly reversible and efficient process.