We demonstrated the fabrication of functionalized graphene nanosheets via low temperature (300 °C) treatment of graphite oxide with a slow heating rate using Mg(OH)2 nanosheets as template. Because of its dented sheet with high surface area, a certain amount of oxygen-containing groups, and low pore volume, the as-obtained graphene delivers both ultrahigh specific gravimetric and volumetric capacitances of 456 F g–1 and 470 F cm–3, almost 3.7 times and 3.3 times higher than hydrazine reduced graphene, respectively. Especially, the obtained volumetric capacitance is the highest value so far reported for carbon materials in aqueous electrolytes. More importantly, the assembled supercapacitor exhibits an ultrahigh volumetric energy density of 27.2 Wh L–1, which is among the highest values for carbon materials in aqueous electrolytes, as well as excellent cycling stability with 134% of its initial capacitance after 10 000 cycles. Therefore, the present work holds a great promise for future design and large-scale production of high performance graphene electrodes for portable energy storage devices.