Lithium iron phosphate (LiFePO₄) batteries occupy the largest current Chinese market share of lithium-ion batteries, resulting in a large number of waste LiFePO4 batteries needed to be considered. In this paper, iron hydroxyphosphate composites (FPOH) derived from waste LiFePO₄ lithium-ion batteries through hydrothermal treatment as environmental functional materials was firstly investigated. It is found that the cathode scraps and aluminum foil can be easily separated, making the recovery of aluminum foil simple. FPOH can be applied to adsorption of heavy metal and degradation of organic dye. Based on adsorption kinetic, isotherms and analysis of products after adsorption of lead, lead hydroxyphosphate was indicated to be formed and the maximum adsorption capacities of FPOH for Pb(II) was 43.203 mg/g. FPOH can also effectively degrade organic dyes of methylene blue in 12 h and the degradation mechanism can be suggested as Fenton-like catalysis evident by radical quenching test. This report provides a promising method for recycling waste LiFePO₄ batteries for the preparation of functional materials applied in environmental remediation.