The invention discloses a method of recycling lithium battery cathode material lithium iron phosphate. The method includes the steps of allowing a waste lithium iron phosphate battery to discharge, disassembling the waste lithium iron phosphate battery to obtain a cathode, crushing the cathode, and screening; adding the crushed and screened particles into an acid liquid for soaking so that metals,such as lithium and iron, in the particles are present in a solution in ion form; soaking, and filtering to obtain solution a; adding immobilized residue into an acid solution for soaking, stirring,and filtering to obtain solution b; adding an alkaline liquid, and stirring until no solid separates out; adding an aluminum salt into the solution with the solid separated so that lithium hydroxide separates out; dissolving crude lithium hydroxide and deionized water in a mass ratio of (0.01-0.1):1, stirring well, filtering, and separating to obtain filtrate c; heating the filtrate c, concentrating, cooling, filtering, washing the separated precipitate from filtering, and drying to obtain finished lithium hydroxide. The method herein allows lithium sources to be maximally recycled when applied to the recycle of lithium battery cathode materials.