Ammonia monooxygenase and analogous oxygenase enzymes contribute to pharmaceutical biotransformation in activated sludge. In this study, we hypothesized that methane monooxygenase can enhance pharmaceutical biotransformation within the benthic, diffuse periphytic sediments (i.e., "biomat") of a shallow, open-water constructed wetland. To test this hypothesis, we combined field-scale metatranscriptomics, porewater geochemistry, and methane gas fluxes to inform microcosms targeting methane monooxygenase activity and its potential role in pharmaceutical biotransformation. In the field, sulfamethoxazole concentrations decreased within surficial biomat layers where genes encoding for the particulate methane monooxygenase (pMMO) were transcribed by a novel methanotroph classified as Methylotetracoccus. Inhibition microcosms provided independent confirmation that methane oxidation was mediated by the pMMO. In these same incubations, sulfamethoxazole biotransformation was stimulated proportional to aerobic methane-oxidizing activity and exhibited negligible removal in the absence of methane, in the presence of methane and pMMO inhibitors, and under anoxia. Nitrate reduction was similarly enhanced under aerobic methaneoxidizing conditions with rates several times faster than for canonical denitrification. Collectively, our results provide convergent in situ and laboratory evidence that methane-oxidizing activity can enhance sulfamethoxazole biotransformation, with possible implications for the combined removal of nitrogen and trace organic contaminants in wetland sediments.