In the past, the pretreatment and indium extracting were conducted in independent disposal system to recycle indium from waste liquid crystal display (LCD), which make the recycling process inefficient and costly. In this study, an efficient and environmental friendly indium recycling process was proposed by an in-situ reaction process. The carbon residue generated in the pretreatment stage (organic removing stage) was used as the reductant to extract indium in the same reaction system. Comparison results indicated that the reaction effects of pyrolytic carbon were much better than coke since the structure of pyrolytic carbon is porous which would make the reactants contact better, and promote the reaction efficiency. Futhermore, results showed that the pyrolytic carbon was sufficient for the indium reduction without adding extra reductant, and indium conversion rate can reach 99.08% under the condition of 935 °C, 5 Pa, 2.5 wt%, 30 min, <0.3 mm. In this study, the organic pollutants were removed, while the indium also could be recycled in a closed-loop system. To sum up, this study could simplify the process route of waste LCD recycling, and provide fundamental basis as well as practical experience for recycling waste LCD environmentally and efficiently.