Efficient recycling of crosslinked polyethylene has been challenging due to manufacturing difficulties caused by chemical crosslinking. This study focuses on simple processing via solid waste powder generation and particle fining for the subsequent crosslinked polyethylene inclusion and dispersion in rigid polyurethane foam. In addition, the concentration effects of crosslinked polyethylene in polyurethane were studied, showing a well-controlled foam microstructure with uniform pores, retained strength, better thermal degradation resistance, and, more importantly, increased thermal capabilities. Thus, the simple mechanical processing of crosslinked polyethylene and chemical urethane foaming showed the massive potential of recycling large amounts of crosslinked polyethylene in foams for broad applications in food packaging, house insulation, and sound reduction.