With the rapid deployment of lithium iron phosphate (LFP) batteries and their finite service life, the annual accumulation of end-of-life LFP batteries has risen substantially. This growing accumulation creates a range of safety and environmental concerns, including leakage, thermal runaway, combustion, and explosion, which threaten natural environments such as water, soil, and air, while also endangering both human and wildlife safety. Therefore, the effective and responsible recycling of spent LFP batteries is crucial. Recycling not only serves as a key approach to converting waste streams into valuable resources but also mitigates the relevant environmental concerns. The recovery of valuable components, particularly lithium, supports resource sustainability and provides environmental, economic, and societal benefits. Among the components of spent LFP batteries, lithium is the most valuable, primarily because these batteries generally have a lower intrinsic recycling value than other lithium-ion batteries (LIBs) and do not contain economically high-value metals such as nickel and cobalt. However, the current industrial recovery rate of lithium from spent LFP batteries remains below 1%, underscoring the urgent need for further development of efficient lithium recovery technologies. Selective lithium leaching has emerged as a highly attractive and environmentally benign approach tailored for lithium recycling, receiving growing attention from both academia and industry. Various selective leaching techniques have been developed, including chemical selective leaching, electrochemical selective leaching, bio-selective leaching, leaching–precipitation, and direct selective leaching, all designed to selectively recover lithium from spent LFP batteries. Despite differences in operational approaches, these methods are founded on comparable thermodynamic principles and recovery goals. This review systematically summarizes recent technological developments and research progress, and integrates thermodynamic potential (E)–pH diagram analysis to evaluate the feasibility, advantages, and limitations of various selective leaching methods. Economic feasibility, operational complexity, and environmental performance are systematically evaluated. Furthermore, the key characteristics, limitations, and practical applicability of these technologies are comparatively discussed, providing a systematic comparison, critical assessment, and prioritization of all current research strategies in terms of industrial feasibility and future development potential. Additionally, this review highlights eight major advantages and five potential development directions for selective lithium leaching, emphasizing its promising role in future lithium recycling systems. Finally, based on selective leaching strategies, a comprehensive process flowchart for the overall recycling of LFP batteries is proposed as a conceptual framework for future industrial implementation.