The lithium iron phosphate (LFP) battery has been widely used in electric vehicles and energy storage for its good cyclicity, high level of safety, and low cost. The massive application of LFP battery generates a large number of spent batteries. Recycling and regenerating materials from spent LFP batteries has been of great concern because it can significantly recover valuable metals and protect the environment. This paper aims to critically assess the latest technical information available on the echelon utilization and recycling of spent LFP batteries. First, it focuses on the progress of disassembly, evaluation and detection, regrouping, and application in echelon utilization. Then, the recycling technologies, including pretreatment, direct repair, and material regeneration, of spent LFPs are summarized. Finally, the paper proposes some challenges in the echelon utilization and recycling of spent LFP batteries, and concludes with recommendations for an intelligent, refined, and clean LFP battery circulation system that are required to ensure the sustainable development of spent LFP battery recycling.