Direct recycling is considered to be the next-generation recycling technology for spent lithium-ion batteries due to its potential economic benefits and environmental friendliness. For the spent layered oxide cathode materials, an irreversible phase transition to a rock-salt structure near the particle surface impedes the reintercalation of lithium ions, thereby hindering the lithium compensation process from fully restoring composition defects and repairing failed structures. We introduced a transition-metal hydroxide precursor, utilizing its surface catalytic activity produced during annealing to convert the rock-salt structure into a layered structure that provides fast migration pathways for lithium ions. The material repair and synthesis processes share the same heating program, enabling the spent cathode and added precursor to undergo a topological transformation to form the targeted layered oxide. This regenerated material exhibits a performance superior to that of commercial cathodes and maintains 88.4% of its initial capacity after 1000 cycles in a 1.3 Ah pouch cell. Techno-economic analysis highlights the environmental and economic advantages of surface catalytic repair over pyrometallurgical and hydrometallurgical methods, indicating its potential for practical application.