The aquatic hyphomycete Heliscus lugdunensis belongs to a group of exclusively aquatic mitosporic fungi with an only scarcely explored potential to oxidatively attack xenobiotic compounds, and was used to study the biotransformation of the environmental pollutant metabolite 1-naphthol. H. lugdunensis metabolized approximately 74% of 1-naphthol within 5 days. The identification and quantification of degradation products using gas chromatography-mass spectrometry, liquid chromatography-mass spectrometry, and high performance liquid chromatography revealed that approximately 12% of the parent compound was converted into 1-naphthylsulfate, 3% was transformed into 1-methoxy-naphthalene, and less than 1% was converted into 1,4-naphthoquinone. A further metabolite, most likely 4-hydroxy-1-naphthylsulfate, was also detected. In contrast to sulfate conjugate metabolites, no glucuronide and glucoside conjugates of 1-naphthol were found, and neither UDP-glucuronyltransferase nor UDP-glucosyltransferase present in H. lugdunensis showed activity towards 1-naphthol. These results support a role of fungi adapted to aquatic environments in affecting the environmental fate of pollutants in aquatic ecosystems.