Urea-formaldehyde (UF) resin residues and the related product wastes as organic hazardous wastes are difficult to be biodegraded or recycled. In this research, a hydrothermal oxidation method using hydrogen peroxide (H2O2) solution has been developed for the degradation and recycling of UF resin residues. The effects of solution concentration, temperature, and time on the degradation efficiency and products of UF resin residues were studied. Under optimal conditions, i.e., 140 °C and 5 wt% H2O2 solution, over 75% of UF resin residues was degraded after 3 h. The degradation efficiency is much higher than that of the traditional hydrothermal treatment or acid hydrolysis method. In addition, results from Fourier transform infrared spectroscopy (FTIR), gas chromatography–mass spectroscopy (GC–MS), nuclear magnetic resonance spectroscopy (NMR), and X-ray diffraction (XRD) confirmed that H2O2 solution degrades UF resin residues to low molecular compounds, such as alcohols, methylal, and amides. This research provides a novel and high-efficient hydrothermal oxidization process for the degradation of UF resin residues, which might be a promising environmentally friendly and low-cost method for the disposal and recycling of industrial UF resin residues.