The release and fate of estrogens have attracted more and more public attention. Biodegradation is an important method for estrogen removal from the environment. However, few comparative studies concentrated on the degradation of 17β-estradiol (E2) by fungi and bacteria. In this study, the removal efficiencies of E2 by fungi (Candida utilis CU-2) and bacteria (Lactobacillus casei LC-1) were investigated through influencing factors, kinetics, and biodegradation pathways. The results demonstrated that both C. utilis CU-2 and L. casei LC-1 have the same degradation efficiency, and they can effectively degrade E2 (10 μM) with nearly 97% degradation efficiency. However, the biodegradation efficiency of the two strains only reached 20% when E2 was used as a sole carbon source, while it increased to 97% with 1.2 g/L sucrose, glucose, or sodium acetate supply, indicating the occurrence of co-metabolism. In addition, the results indicated that 35°C and 0.6 g/L sucrose favored the degradation. However, the addition of excessive carbon sucrose (10 g/L) significantly inhibited the biodegradation of E2. Besides, the degradation of E2 with ~0–10 g/L sucrose as co-substrate followed the first-order kinetics well. Through intermediate products analysis, 12 degradation products were identified, and they were mainly produced via hydroxylation and methylation, among others, among which C14H22O4 (m/z:[M + H]+ = 255) was detected as the product with the smallest amount of carbon in this study. Based on the detected products and previous studies, five biodegradation pathways were proposed. To our knowledge, there are few reports about the comparisons of E2 removal between fungi and bacteria. Moreover, the results confirmed that the strain CU-2 and the strain LC-1 may have similar degradation characteristics and metabolic mechanisms in the degradation of E2. This study may provide a promising bio-treatment method with low energy consumption for E2 removal from aqueous environments and help in understanding their biodegradation mechanisms.