The capacity of carbon atomic chains with different terminations for hydrogen storage is studied using first-principles density functional theory calculations. Unlike the physisorption of H2 on the H-terminated chain, we show that two Li (Na) atoms each capping one end of the carbon chain can hold ten H2 molecules with optimal binding energies for room temperature storage. The hybridization of the Li 2p states with the H2 sigma orbitals contributes to the H2 adsorption. However, the binding mechanism of the H2 molecules on Na arises only from the polarization interaction between the charged Na atom and the H2. Moreover, additional H2 molecules can be bound to the carbon atoms at the chain ends due to the charge transfer between Li 2s2p (Na 3s) and C 2p states. Importantly, dimerization of these isolated metal-capped chains does not affect the hydrogen binding energy significantly. In addition, a single chain can be stabilized effectively by termination on the C60 clusters. With a hydrogen uptake of > 10 wt % on Li-coated C60-Cn-C60 (n = 5, 8), the Li12C60-Cn-Li12C60 complex, without reducing the number of adsorbed H2 molecules per Li, can serve as better building blocks of polymers than the (Li12C60)2 dimer. These findings suggest a new route to design cluster-assembled storage materials based on terminated sp carbon chains.