The Public Security Bureau of Baokang County in Hubei posted a video on Chinese social media platform Weibo on Monday of the confiscation of the grenade from a resident in Huangbao Town.
Police reported that the 90-year-old woman had discovered the grenade in a field more than 20 years ago and simply thought it was a piece of iron.
She brought it home and has used it as a hammer for nails and as a pestle to grind chilies, peppers and crush seeds ever since.
The grenade was only discovered on Sunday when an old building belonging to the woman was being demolished.
The police promptly led a professional bomb disposal personnel to the house and confiscated the grenade.
"Fortunately, this safety hazard has been eliminated and has not caused any harm or injuries," the Baokang Public Security Bureau wrote.