As the main power source for modern portable electronic devices and electric vehicles, lithium-ion batteries (LIBs) are favored for their high energy density and good cycling performance. However, as the usage time increases, battery performance gradually deteriorates, leading to a heightened risk of thermal runaway (TR) increases, which poses a significant threat to safety. Performance degradation is mainly manifested as capacity decline, internal resistance increase and cycle life reduction, which is usually caused by internal factors of LIBs, such as the fatigue of electrode materials, electrolyte decomposition and interfacial chemical reaction. Meanwhile, external factors of LIBs also contribute to performance degradation, such as external mechanical stresses leading to internal structural damage of LIBs, triggering internal short-circuit (ISC) and violent electrochemical reactions. In this paper, the performance degradation of LIBs and TR mechanism is described in detail, as well as the impact of performance degradation on the TR mechanism of batteries. This paper summarizes recent advances in studying the mechanism of battery TR induced by battery performance degradation.