From portable electronics to electric vehicles, lithium-ion batteries have been deeply integrated into our daily life and industrial fields for a few decades. The booming field of battery manufacturing could lead to shortages in resources and massive accumulation of battery waste, hindering sustainable development. Therefore, hydrometallurgy-based approaches have been widely used in industrial recycling to recover cathode materials due to their high efficiency and throughput. Impurities have always been a great challenge for hydrometallurgical recycling, introducing challenges to maintain the consistency of product quality because of potential unintended effects caused by impurities. Herein, after comprehensive investigation, we first report the impacts of phosphate impurity on a recycled LiNiCoMnO ("NCM622") cathode via a hydrometallurgy method. We demonstrate that a passivation layer of LiPO is formed at grain boundaries during sintering, which significantly raises the activation barrier and hinders lithium diffusion. In addition, the distinct degradation of cathode electrochemical properties is observed from poor particle morphology and high cation mixing as a result of phosphate impurity. Cathode powders with 1 at. % phosphate impurity retain a capacity of 146 mAh/g after 100 cycles at 0.33, 6% less than that of a virgin cathode. Furthermore, cathodes with higher phosphate concentrations perform even worse in electrochemical tests. Therefore, phosphate impurities are detrimental to the hydrometallurgical recycling of NCM cathode materials and need to be excluded from the recycling process.