Iodinated X-ray contrast media (ICM) such as diatrizoate, iohexol, iomeprol, iopamidol, and iopromide are commonly used in medical imaging for radiological visualization of a variety of anatomic structures. Because of their highly persistent nature and poor removal by conventional wastewater treatment, ICM can often remain unchanged after entering the environment or they are transformed into many different by-products in complex physical, chemical, and biological processes. Large amounts of ICM and their by-products are found in natural waters, groundwater, drinking water (up to 100 µg/L), and even in soil, where they can be a potential threat to the inhabitants of these environments. Because knowledge about the fate of ICM in various environments is dispersed and it concerns specific areas, the main purpose of this review is to summarize the available information about their occurrence, chemical and biological transformation/degradation, and toxicity to living organisms. The topics discussed particularly focus on mechanisms of ICM degradation/transformation in water using advanced oxidation processes and the biotransformation/biodegradation of ICM by microorganisms under different conditions, as well as the toxicity of ICM and their transformation by-products to humans and other organisms. Although environmental risk is not expected from the parent compounds of ICM, their continuous input to the water and the formation of toxic by-products may constitute a long-term potential risk for living organisms. Therefore, monitoring the transport and fate of ICM in various environments seems necessary.