Abstract: As global climate change intensifies, the inherent volatility of renewable energy poses significant challenges to the stability of energy structures. H2 serves as an efficient energy storage carrier to alleviate the imbalance between energy supply and demand. Compared to surface storage, underground hydrogen storage offers longer storage cycles, larger capacities, and higher safety. Furthermore, carbon capture, utilization, and storage plays a key role in reducing atmospheric CO2 emissions. Underground biological methanation (UBM) technology integrates carbon utilization with energy storage by injecting CO2 and H2 into subsurface reservoirs. By leveraging microbial metabolic processes to convert these gases into methane, UBM facilitates the construction of "human-made natural gas fields" and holds immense potential for strategic energy reserves. Regarding the reaction mechanism, this paper indicates two primary metabolic pathways for UBM. Hydrogenotrophic methanogenesis is the dominant pathway in subsurface environments, with its rate increases linearly as the H2 partial pressure. Acetoclastic methanogenesis serves as an efficient alternative when CO2 concentrations are high and H2 is insufficient. To regulate UBM efficiency, this paper adopts a "geology-environment-engineering" multidimensional coupling perspective to establish an optimal operational window for high-efficiency conversion. Specifically, sandstone or carbonate reservoirs with a porosity 10% and a permeability > 10 mD are preferred. Formation temperatures should be controlled between 40°C and 60°C and water salinity maintained below 90 g/L. Furthermore, the recommended H2/CO2 ratio is between 3.8 and 4.2 and stabilize the operating pressure at 40–80 bar to maximize substrate solubility. In terms of engineering applications, although projects such as Austria's "Underground Sun Storage" have verified technical feasibility, several bottlenecks must still be addressed, including low reaction rates, near-wellbore bioclogging, and gas leakage risks. To address these, this paper establishes an evaluation system encompassing geological-physical characteristics, biological suitability, and engineering resource synergy to facilitate site selection. Finally, three stepwise industrial development paths for UBM: a near-term focus on above-ground reactor conversion integrated with LNG applications; a mid-term transition toward utilizing depleted reservoirs for large-scale in-situ UBM energy storage; and a long-term evolution toward coupling with Direct Air Capture to achieve a deep low-carbon cycle.