<p>Lithium iron phosphate (LiFePO₄, LFP) batteries have shown extensive adoption in power applications in recent years for their reliable safety, high theoretical capability and low cost. Nevertheless, the finite lifespan of these batteries necessitates the future processing of a significant number of spent LFP batteries, underscoring the urgent need for the development of both efficient and eco-friendly recycling methods. This study combines the advantages of wet leaching and direct regeneration methods, leveraging citric acid’s multifaceted role to streamline the combined leaching and hydrothermal processes. Results indicate that citric acid efficiently leaches all elements from spent LFP batteries. Furthermore, through its unique structure, it enhances hydrothermal regeneration by stabilizing metal ions and controlling crystal growth, and also acts as a carbon source for the surface carbon coating of regenerated LFP (R-LFP). The R-LFP shows outstanding electrochemical stability, achieving a discharge capacity of 155.1 mAh·g⁻¹ at 0.1C, with a capacity retention rate of 93.2% after 300 cycles at 1C. Furthermore, economic and environmental analyses demonstrate this method’s superior cost-effectiveness and sustainability. Therefore, the method proposed in this study is efficient, simple and avoids the complex process of element separation, innovatively using a single reagent to achieve closed-loop recycling of LFP batteries, providing a novel and effective solution for the resource sustainability application.</p> Graphical abstract <p></p>