Solvent-free dry-processed electrode (DPE) technology has become a promising platform for the manufacturing of lithium-ion batteries, offering a low carbon footprint, enhanced energy efficiency, and cost-effectiveness compared to conventional slurry-based processes. In addition to its process sustainability, the dry process enables the formation of a distinctive electrode microstructure, characterized by a well interconnected pore network, low tortuosity, a broadened active surface area, and improved electron conduction pathways, which supports high energy density and power performance. Although considerable laboratory-scale progress has been made, several critical challenges, such as the non-uniform binder distribution, insufficient mechanical integrity during large-scale manufacturing, and limitations in current collector compatibility, still hinder the commercialization of DPEs while preserving their microstructural advantages. Overcoming these barriers requires synergistic innovations in terms of materials design and process engineering. This review highlights recent advancements in key material components, including active materials, conductive additives, binders, and current collectors, along with process technologies such as powder mixing, kneading, laminating, and calendering, all from the perspective of microstructural optimization. We discuss how materials innovation can address process limitations and, conversely, how novel process strategies can accommodate material constraints. Finally, this review provides a micro structure-centric perspective on the materials and process innovations required for ensuring the scalable production of high-performance and sustainable DPEs with unique microstructural features.