The separation of Cd and Ni from Ni–Cd batteries using an aqueous two-phase system (ATPS) composed of copolymer L35, Li2SO4 and water is investigated. The extraction behavior of these metals from the bottom phase (BP) to the upper phase (UP) of the ATPS is affected by the amount of added extractant (potassium iodide), tie-line length (TLL), mass ratio between the phases of the ATPS, leaching and dilution factor of the battery samples. Maximum extraction of Cd (99.2±3.1)% and Ni (10.6±0.4)% is obtained when the batteries are leached with HCl, under the following conditions: 62.53% (w/w) TLL, concentration of KI equal to 50.00mmolkg−1, mass ratio of the phases equal to 0.5 and a dilution factor of battery samples of 35. This novel methodology is efficient to separate the metals in question, with the advantage of being environmentally safe, since water is the main constituent of the ATPS, which is prepared with recyclable and biodegradable compounds.