Recycling of spent lithium-ion batteries (LIBs) has aroused extensive attentions with the expanding demand of electric vehicles. Two considerable challenges of LIBs recycling were separating electrode materials from metallic foils and reclaiming hazardous electrolyte. In the current study, an environmentally benign process was developed to recovery electrode materials and hazardous electrolyte. The main merits were that no strong acid or alkali was applied in the process, and the electrode materials were reclaimed in flaky form. A special complex aqueous peeling agent, namely exfoliating and extracting solution (AEES) was manufactured and applied in the process. The results indicated that cathode material could be exfoliated from Al foil by weakening the mechanical interlocking force and Coulomb force between cathode materials and foils. Ethylene carbonate (EC) and propylene carbonate (PC) could be extracted from electrodes and separators and recovered via distillation. LiPF6 could be precipitated from EC and PC and recovered via filtration. The conditions could be precisely controlled by optimizing the concentration of AEES. The recovery efficiencies of electrolyte, Al foil, Cu foil and electrode materials were 95.6%, 99.0%, 100% and near 100%, respectively. The process efficiently avoided infiltration of impurities into the electrode materials and is environmentally friendly for industrial application.