A new yeast strain isolated from the pharmaceutical wastewater was capable of utilizing cefdinir as a sole carbon source for their growth in mineral medium. The yeast was identified and named as Candida sp. SMN04 based on morphology and 18S-ITS-D1/D2/D3 rRNA sequence analysis. The interaction between factors pH (3.0-9.0), inoculum dosage (1-7%), time (1-11 day) and cefdinir concentration (50-450 mg/L) was studied using a Box-Behnken design. The factors were studied as a result of their effect on cell dry weight (R1; g/L), extended spectrum β-lactamase (ESBL) assay (R2; mm), P450 activity (R3; U/mL) and degradation (R4; %). Maximum values of R1, R2, R3 and R4 were obtained at central values of all the parameters. The isolated yeast strain efficiently degraded 84% of 250 mg L⁻¹ of cefdinir within 6 days with a half-life of 2.97 days and degradation rate constant of 0.2335 per day. Pseudo-first-order model efficiently described the process. Among the various enzymes tested, the order of activity at the end of Day 4 was noted to be: cytochrome P450 (1.76 ± 0.03) > NADPH reductase (1.51 ± 0.20) > manganese peroxidase and amylase (0.66 ± 0.15; 0.66 ± 0.70). Intermediates were successfully characterized by liquid chromatography-mass spectrometry. The opening of the β-lactam ring involving ESBL activity was considered as one of the major steps in the cefdinir degradation process. Fourier transform-infrared spectroscopy analysis showed the absence of spectral vibrations between 1766 and 1519 cm⁻¹ confirming the complete removal of lactam ring during cefdinir degradation. The results of the present study are promising for the use of isolated yeast Candida sp. SMN04 as a potential bioremediation agent.