Cathode-driven applications of bio-electrochemical systems (BESs) have the potential to transform CO2 into value-added chemicals using microorganisms. However, their commercialisation is limited as biocathodes in BESs are characterised by slow start-up and low efficiency. Understanding biosynthesis pathways, electron transfer mechanisms and the effect of operational variables on microbial electrosynthesis (MES) is of fundamental importance to advance these applications of a system that has the capacity to convert CO2 to organics and is potentially sustainable. In this work, we demonstrate that cathodic potential and inorganic carbon source are keys for the development of a dense and conductive biofilm that ensures high efficiency in the overall system. Applying the cathodic potential of -1.0 V vs. Ag/AgCl and providing only gaseous CO2 in our system, a dense biofilm dominated by Acetobacterium (ca. 50% of biofilm) was formed. The superior biofilm density was significantly correlated with a higher production yield of organic chemicals, particularly acetate. Together, a significant decrease in the H2 evolution overpotential (by 200 mV) and abundant nifH genes within the biofilm were observed. This can only be mechanistically explained if intracellular hydrogen production with direct electron uptake from the cathode via nitrogenase within bacterial cells is occurring in addition to the commonly observed extracellular H2 production. Indeed, the enzymatic activity within the biofilm accelerated the electron transfer. This was evidenced by an increase in the coulombic efficiency (ca. 69%) and a 10-fold decrease in the charge transfer resistance. This is the first report of such a significant decrease in the charge resistance via the development of a highly conductive biofilm during MES. The results highlight the fundamental importance of maintaining a highly active autotrophic Acetobacterium population through feeding CO2 in gaseous form, which its dominance in the biocathode leads to a higher efficiency of the system.