In this work, an effective and environmentally friendly process for the recovery of cobalt (Co) and lithium (Li) from spent lithium-ion batteries (LIBs) and simultaneously detoxification of polyvinyl chloride (PVC) in subcritical water was developed. Lithium cobalt oxide (LiCoO2) power from spent LIBs and PVC were co-treated by subcritical water oxidation, in which PVC served as a hydrochloric acid source to promote metal leaching. The dechlorination of PVC and metal leaching was achieved simultaneously under subcritical water oxidation. More than 95% Co and nearly 98% Li were recovered under the optimum conditions: temperature 350°C, PVC/LiCoO2 ratio 3:1, time 30min, and a solid/liquid ratio 16:1 (g/L), respectively. Moreover, PVC was completely dechlorinated at temperatures above 350°C without any release of toxic chlorinated organic compounds. Assessment on economical and environmental impacts revealed that the PVC and LiCoO2 subcritical co-treatment process had significant technical, economic and environmental benefits over the traditional hydrometallurgy and pyrometallurgy processes. This innovative co-treatment process is efficient, environmentally friendly and adequate for Co and Li recovery from spent LIBs and simultaneous dechlorination of PVC in subcritical water.