The presence of cuticle is the primary problem factor contributing to felting shrinkage, hydrophobicity, and yellowness in wool fabric. Substantial disulfide bonds forming cross-links within the scale layer result in an extraordinarily dense structure. During dyeing and finishing processes, the scale layer poses a significant barrier, impeding the efficient penetration of various chemicals. To mitigate the hindrance due to disulfide bonds in the scales, this study employed a cold pad-batch (CPB) reduction pretreatment followed by H2O2 bleaching to treat woolen fabrics. The physical, chemical, and mechanical properties of the treated wool were evaluated through scanning electron microscopy (SEM), Allwörden reaction, whiteness index measurement, wettability assessment, felting properties examination, dyeing performance analysis, Raman spectroscopy, and tensile testing. The results indicated a 23.50% increase in the whiteness index with minimal damage to the strength of the fabric. Furthermore, the water absorption time decreased from 300 s to 6 s, and felting shrinkage was decreased to <10%. These findings indicate significant improvements in the hydrophilicity and anti-felting properties of the wool. Additionally, SEM and Allwörden reactions demonstrated substantial changes in the morphology and structure of the fibers after the pretreatment, corroborated by dyeing performance results. Raman spectra exhibited that the relative content of disulfide bonds within the scale layer decreased from 30.95% to 20.95%. It saved more than 20% of water consumption and 70% of energy consumption. The combination process greatly improved the properties of wool fibers without further damage to the main body.