With the growing demand for nickel in the stainless steel and battery industries, conventional methods of extracting nickel from ores face challenges such as high production costs and environmental concerns. This study proposes a new process for the recovery of nickel metal and the production of nickel-iron alloys from nickel-bearing scrap. The reduction rates of nickel and iron oxides were investigated by optimizing the roasting temperature, time, and C/O ratio, and the process was optimized using response surface methodology (RSM). Through melt experiments on the reduced materials, the Ni-Fe particles were spontaneously aggregated driven by the Gibbs free energy change, which promoted their transfer to the metallic phase, and the recovery of metallic nickel was obtained to be 98.46%, with the nickel content of the nickel-iron alloy being about 24.61 wt%. By combining reduction melting and vitrification, the efficient recovery of metallic nickel and the production of ferro-nickel alloy were achieved, while the prepared glass slag showed low nickel content and dense amorphous structure with good environmental stability and safety. This study provides a new technical method for the comprehensive utilization of nickel-containing waste slag with significant environmental and economic benefits.