Proton-exchange membrane fuel cells (PEMFCs) and direct methanol fuel cells (DMFCs) are promising power sources from portable electronic devices to vehicles. The high-cost issue of these low-temperature fuel cells can be primarily addressed by using platinum-group metal (PGM)-free oxygen reduction reaction (ORR) catalysts, in particular atomically dispersed metal–nitrogen–carbon (M–N–C, M = Fe, Co, Mn). Furthermore, a significant advantage of M–N–C catalysts is their superior methanol tolerance over Pt, which can mitigate the methanol cross-over effect and offer great potential of using a higher concentration of methanol in DMFCs. Here, we investigated the ORR catalytic properties of M–N–C catalysts in methanol-containing acidic electrolytes via experiments and density functional theory (DFT) calculations. FeN4 sites demonstrated the highest methanol tolerance ability when compared to metal-free pyridinic N, CoN4, and MnN4 active sites. The methanol adsorption on MN4 sites is even strengthened when electrode potentials are applied during the ORR. The negative influence of methanol adsorption becomes significant for methanol concentrations higher than 2.0 M. However, the methanol adsorption does not affect the 4e− ORR pathway or chemically destroy the FeN4 sites. The understanding of the methanol-induced ORR activity loss guides the design of promising M–N–C cathode catalyst in DMFCs. Accordingly, we developed a dual-metal site Fe/Co–N–C catalyst through a combined chemical-doping and adsorption strategy. Instead of generating a possible synergistic effect, the introduced Co atoms in the first doping step act as “scissors” for Zn removal in metal–organic frameworks (MOFs), which is crucial for modifying the porosity of the catalyst and providing more defects for stabilizing the active FeN4 sites generated in the second adsorption step. The Fe/Co–N–C catalyst significantly improved the ORR catalytic activity and delivered remarkably enhanced peak power densities (i.e., 502 and 135 mW cm−2) under H2–air and methanol–air conditions, respectively, representing the best performance for both types of fuel cells. Notably, the fundamental understanding of methanol tolerance, along with the encouraging DMFC performance, will open an avenue for the potential application of atomically dispersed M–N–C catalysts in other direct alcohol or ammonia fuel cells.