A severe threat was posed due to improper and inefficient recycling of waste batteries in China. The present work considered the fundamental aspects of the recycling of cadmium from waste nickel–cadmium batteries by means of vacuum metallurgy separation in scale-up. In the first stage of this work, the characterization of waste nickel–cadmium batteries was carried out. Five types of batteries from different brands and models were selected and their components were characterized in relation to their elemental chemical composition and main phase. In the second stage of this work, the parameters affecting the recycling of cadmium by means of vacuum metallurgy separation were investigated and a L16 (44) orthogonal design was applied to optimize the parameters. With the thermodynamics theory and numerical analysis, it can be seen that the orthogonal design is an effective tool for investigating the parameters affecting the recycling of cadmium. The optimum operating parameters for the recycling of cadmium obtained by orthogonal design and verification test were 1073K (temperature), 2.5h (heating time), 2wt.% (the addition of carbon powder), and 30mm (the loaded height), respectively, with recycling efficiency approaching 99.98%. The XRD and ICP-AES analyzed results show that the condensed product was characterized as metallic cadmium, and cadmium purity was 99.99% under the optimum condition.