The popularity of portable electronic devices and electric vehicles has led to the drastically increasing consumption of lithium-ion batteries recently, raising concerns about the disposal and recycling of spent lithium-ion batteries. However, the recycling rate of lithium-ion batteries worldwide at present is extremely low. Many factors limit the promotion of the battery recycling rate: outdated recycling technology is the most critical one. Existing metallurgy-based recycling methods rely on continuous decomposition and extraction steps with high-temperature roasting/acid leaching processes and many chemical reagents. These methods are tedious with worse economic feasibility, and the recycling products are mostly alloys or salts, which can only be used as precursors. To simplify the process and improve the economic benefits, novel recycling methods are in urgent demand, and direct recycling/regeneration is therefore proposed as a next-generation method. Herein, a comprehensive review of the origin, current status, and prospect of direct recycling methods is provided. We have systematically analyzed current recycling methods and summarized their limitations, pointing out the necessity of developing direct recycling methods. A detailed analysis for discussions of the advantages, limitations, and obstacles is conducted. Guidance for future direct recycling methods toward large-scale industrialization as well as green and efficient recycling systems is also provided.