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The surging deployment of electric vehicles and energy storage systems is rapidly accelerating the accumulation of spent lithium-ion batteries (LIBs), underscoring the urgency of efficient and sustainable regeneration technologies. Although LiFePO<sub>4</sub> (LFP) dominates the commercial iron-based cathode market, its long-term operation is plagued by lithium (Li) loss, FePO<sub>4</sub> formation, and the accumulation of Li-Fe anti-site defects, which collectively block the [010] diffusion channels and severely impair electrochemical reversibility. Here, we demonstrate that the performance decay of LFP originates fundamentally from a stress-induced structural degradation process rather than simple compositional imbalance. Guided by this mechanistic insight, we develop a stress-regulated electrochemical regeneration strategy in which an applied electric field simultaneously drives Fe<sup>3+</sup> reduction and targeted Li<sup>+</sup> reinsertion into the depleted lattice. This self-limiting repair process eliminates Li-Fe anti-site defects (from 3.24% to 1.05%), releases accumulated lattice micro-strain, and reconstructs a relaxed, fully accessible Li<sup>+</sup> transport framework. Subsequent magnesium and aluminum co-doping introduces uniform compressive prestress, enabling controlled redistribution of internal lattice stress and imparting long-range structural robustness. The regenerated LFP exhibits 94% capacity retention after 500 cycles at 1C rate, together with markedly improved structural reversibility. Life-cycle assessment confirms both economic and environmental benefits.