Rational plastic recycling is critical for addressing the environmental challenges associated with plastic waste. Among the various recycling methods, chemical recycling, particularly via homogeneous catalysis, holds promise for converting plastic waste into valuable products. Post-consumer polymer wastes could present a challenge for catalytic upcycling due to the structural inhomogeneity and functionalization of the polyolefin chains. The impact of substrate aging on the performance of the upcycling catalyst can be viewed as an “inverse problem” of heterogeneous catalysis and has not received sufficient attention in mechanistic studies on this subject. Herein, we present a density functional theory study on the dehydrogenative upcycling of polyethylene (PE) with different in-chain impurities, representing the chemistry of post-consumption PE wastes. We selected the (^tBu4POCOP)-Ir pincer complex catalyzed dehydrogenation of PE as our model reaction. The calculations reveal that common in-chain impurities found in PE, such as carbonyl, hydroxyl, epoxides, and chlorine atoms, inhibit the overall catalyst performance. These impurities form stable molecular complexes with the catalyst, leading to a substantial increase in the energy barriers of the initial reaction step, the C-H bond addition. We also observe that the reaction on the ideal crystalline PE is also impeded. However, highly distorted PE chains exhibit greater susceptibility toward the (^tBu4POCOP)-Ir catalyst. Our mechanistic studies demonstrated that the reaction on the side alkane chains is kinetically favorable compared with the reaction on the PE backbone. The study highlights the critical role of in-chain heterogenieties in the catalytic activation of polymer chains and provides valuable insights into the development of effective technologies for upcycling plastic waste.