Abstract Lithium‐ion battery (LIB) recycling plays a vital role in the circular economy by supporting a reliable and sustained supply of critical minerals. Commercial black mass, comprising cathode active materials and anodic graphite from spent LIBs, typically requires multiple energy‐intensive steps for the recovery and regeneration of its critical minerals. Here, we report that a single‐step microwave‐induced plasma pre‐treatment can lead to 85% selective Li recovery in water and ≈95% recovery of all transition metals in 1 M citric acid at room temperature. Of the various gas compositions evaluated, H 2 /N 2 demonstrates the highest effectiveness. The synergistic action of H 2 plasma, microwave coupling, and localized heating reduces the layered LIB cathode metal oxides to their metallic or lower‐valence oxide forms, thereby enabling their facile extraction in green solvents. The residue consists of anodic graphite, which is regenerated through plasma treatment that reduces defects and decreases the interlayer spacing. The recovered graphite shows excellent efficiency as an LIB anode, surpassing commercial graphite in its activity. While here microwave plasma pretreatment has been explored for LIB recycling, it is a technological innovation that can serve as a versatile pretreatment step for hydrometallurgical extraction of critical minerals. r