Lead-acid batteries contain a lot of valuable metals, such as lead, tin, copper, antimony, as well as waste plastic shells and other harmful substances. Cleaner and efficient recycling of waste lead-acid batteries is of significance in environmental protection and comprehensive recycling of resources. In this study, oxygen-enriched side-blow pool smelting technique was developed and innovatively employed to recycle lead battery paste. This study investigated the reaction mechanism of lead recycling in lead paste-CaO-FeO-SiO2-C reaction system. Therefore, the phase transformation and evolution of lead paste in oxidizing atmosphere were described in detail. XRD and SEM-EDS analysis results indicated that the whole reaction evolution can be summarized as follows: PbO and PbS were formed from PbSO4 in a weak oxidizing atmosphere through the thermal decomposition and reduction reactions. Then the lead oxide formed was combined with slag-forming components (CaO, SiO2, FeC2O4·2H2O) to generate new oxides phase. As the temperature increases, metallic lead was extracted and recycled through the reactions between lead sulfide and the new-formed oxide phase.