Abstract Among direct recycling methods for spent lithium‐ion batteries, solid‐state regeneration is the route with minimal bottlenecks for industrial application and is highly compatible with the current industrial cathode materials production processes. However, surface structure degradation and interfacial impurities of spent cathodes significantly hinder Li + replenishment during restoration. Herein, we propose a unique advanced oxidation strategy that leverages the inherent catalytic activity of spent layered cathode materials to address these challenges. This strategy decomposes H 2 O 2 to generate •OH and •O 2 − free radicals, facilitating oxidation reactions with the surface of the spent cathode. As a result, this approach effectively elevates the Ni valence state, modifies the surface microstructure, and eliminates fluorine‐containing interface impurities, thereby promoting the solid‐state regeneration process. The regenerated LiNi 0.83 Co 0.12 Mn 0.05 O 2 cathodes demonstrate a specific capacity of 206 mAh g −1 at 0.1 C, comparable to commercially available cathodes. Meanwhile, this advanced oxidation strategy proves adaptable and scalable for treating industrial dismantled LiNi 0.5 Co 0.2 Mn 0.3 O 2 black mass. A 3.1 Ah pouch cell assembled with the regenerated LiNi 0.5 Co 0.2 Mn 0.3 O 2 exhibits impressive capacity retention of 74% after 500 cycles. Additionally, a techno‐economic analysis reveals that this strategy possesses low energy consumption, minimal environmental footprint, and high economic viability, suggesting its suitability for the battery recycling industry.