Some have used Colossians 1:20 to argue for universalism — that all rebel creatures, including the devil will be reconciled to God in the end and there will be no eternal hell.

Colossians 1:19–20,

In him all the fullness of God was pleased to dwell, ²⁰ and through him to reconcile to himself all things, whether on earth or in heaven, making peace by the blood of his cross.

What's Said Elsewhere

I don’t think such universalism fits with what Jesus or Paul or John say elsewhere. Nor is it a necessary meaning of Colossians 1:20.

• Jesus says that there are some who “will go away into eternal punishment, but the righteous into eternal life” (Matthew 25:46).
• Paul said there are some who “will suffer the punishment of eternal destruction, away from the presence of the Lord” (2 Thessalonians 1:9).
• John says of these that “the smoke of their torment goes up forever and ever” (Revelation 14:11).

"All Things" Then, Not Now

One of the reasons some think Colossians 1:20 says something different from these three texts is that it's assumed Paul means “all things” in the universe now will someday be reconciled to God. I don’t think he means that.

I think he means that the blood of Christ has secured the victory of God over the universe in such a way that the day is coming when “all things” that are in the new heavens and the new earth will be entirely reconciled to God with no rebel remnants.

Before that day comes, all those who refuse to be reconciled by his blood will be cast into “outer darkness” (Matthew 8:12), so that it is not reckoned to be a part of the new heavens and the new earth.

The rebels in hell will simply not be part of the “all things” which fill the new heavens and the new earth. They are “outside” of the new reality, in the “darkness.”

Heinrich Meyer explains Colossians 1:20 in the same way. He puts it like this:

Through the Parousia the reconciliation of the whole which has been effected in Christ will reach its consummation, when the unbelieving portion of mankind will be separated and consigned to Gehenna, the whole creation in virtue of the Palingenesia [new creation] (Matthew 19:28) will be transformed into its original perfection, and the new heaven and the new earth will be constituted as the dwelling of “righteousness” (2 Peter 3:13) and the “glory” of the children of God (Romans 8:21); while the demoniac portion of the angelic world will be removed from the sphere of the new world, and cast into hell. Accordingly, in the whole creation there will no longer be anything alienated from God and object of his hostility, but ta panta [all things] will be in harmony and reconciled with him. (H. A. W. Meyer, Critical and Exegetical Hand-Book to the Epistles to Philippians and Colossians and to Philemon [Winona Lake, Indiana: Alpha Publications, 1980 (1883)], 241–42, biblical citations updated.)

No Whiff of Rebellion

One more pointer in this direction.

Perhaps there is a very good reason why Paul omits the term “under the earth” when he says that Christ will “reconcile to himself all things, whether on earth or in heaven.” He does not say: “whether on earth or in heaven or under the earth,” as he does in Philippians 2:10. Indeed there is a good reason for not saying this.

The reason would seem to be that there will be an “outer darkness” — an “under the earth” — that does indeed have unreconciled beings in it. But this does not take away from “all things” being reconciled in heaven and on the earth in the age to come.

In God’s new universe (the new heaven and the new earth) there will be no whiff of rebellion. All of that is in another dimension. “Outside” in “darkness.” Real. But not part of the new reality. In the new reality all things are reconciled to Christ by his blood.