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The phenolic xenobiotics nonylphenol (NP), 4-tert-octylphenol (4-t-OP), and 4-cumylphenol (4-CP) have the potential to seriously disrupt the endocrine system. Volatile phenols (VPs), especially those present in landfill leachate, also adversely affect the health of numerous organisms. Microbial degradation of xenobiotics can result in the formation of intermediates with higher toxicity than the precursor substrates. Therefore, the main aim of this study was to assess the changes in environmental ecotoxicity during the biotransformation of nonylphenol, 4-tert-octylphenol, 4-cumylphenol and volatile phenols by Umbelopsis isabellina using a battery of biotests. The application of bioindicators belonging to different taxonomic groups and diverse trophic levels (producers, consumers, and reducers) indicated a significant reduction in toxicity during the cultivation of fungus cultures both for nonylphenol, 4-tert-octylphenol, 4-cumylphenol and volatile phenols. The rate of toxicity decline was correlated with the degree of xenobiotic biotransformation. Removal of 4-cumylphenol and 4-tert-octylphenol also led to a decrease in the anti-androgenic potential. Moreover, this is the first report demonstrating the anti-androgenic properties of 4-cumylphenol. The results showed that U. isabellina is an attractive tool for the bioremediation and detoxification of contaminated environments.