In the past decade, traditional fuel vehicles have gradually been replaced by electric vehicles (EVs) to help reduce the consumption of fossil fuels and the emissions of greenhouse gases, and lithium iron phosphate (LFP) batteries stand as one of the promising batteries to power such EVs, because of their cost-effectiveness and high energy density. However, with the increasing number of EVs each year and the end-of-life of LFP batteries, proper recycling of such spent LFP (SLFP) batteries has become an unavoidable challenge. As such, the development of a green, efficient, and low-cost method to recycle SLFP batteries is of crucial importance, which will benefit the industries for manufacturing LFP batteries and EVs. To this end, we provide a review to focus on understanding the current development of recycling SLFP batteries and summarizing the current research status and technological challenges existing in recycling SLFP batteries. Specifically, we provide detailed elucidations regarding the environmental risks of such SLFP batteries, common techniques deployed for separating cathode materials, and state-of-the-art methods used for recycling cathode materials. Additionally, after a comprehensive comparison of the methodologies deployed for recycling SLFP batteries, perspectives on optimizing their deployments toward industry-scale processing are provided.