Direct recycling of cathode materials has attracted phenomenal attention due to its economic and eco-friendly advantages. However, existing direct recycling technologies are difficult to apply to highly degraded layered materials as the accumulation of thick rock-salt phases on their surfaces not only blocks lithiation channels but also is thermodynamically difficult to transform into layered phases. Here, a surface engineering-assisted direct upcycling strategy that reactivates the lithium diffusion channels at the highly degraded cathode surfaces using acid etching explored. Acid can selectively remove the electrochemically inert rock-salt phases on the surface while simultaneously dissociating the degraded polycrystalline structure to single crystals, thereby reducing the thermodynamic barrier of the relithiation process and enhancing the stability of the regenerated cathode. This strategy can restore the capacity of highly degraded LiNi0.5Co0.2Mn0.3O2 from 59.7 to 165.4 mAh g-1, comparable to that of commercialized ones. The regenerated cathode also exhibits excellent electrochemical stability with a capacity retention of 80.1% at 1 C after 500 cycles within 3.0-4.2 V (vs graphite) in pouch-type full cells. In addition, the generality of this strategy has also been validated on Ni-rich layered materials and LiCoO2. This work presents a promising approach for direct recycling of highly degraded cathode materials.