Modified mycotoxins are metabolites that normally remain undetected during the testing for parent mycotoxin. These modified forms of mycotoxins can be produced by fungi or generated as part of the defense mechanism of the infected plant. In some cases, they are formed during food processing. The various processing steps greatly affect mycotoxin levels present in the final product (free and modified), although the results are still controversial regarding the increase or reduction of these levels, being strongly related to the type of process and the composition of the food in question. Evidence exists that some modified mycotoxins can be converted into the parent mycotoxin during digestion in humans and animals, potentially leading to adverse health effects. Some of these formed compounds can be even more toxic, in case they have higher bioaccessibility and bioavailability than the parent mycotoxin. The modified mycotoxins can occur simultaneously with the free mycotoxin, and, in some cases, the concentration of modified mycotoxins may exceed the level of free mycotoxin in processed foods. Even though toxicological data are scarce, the possibility of modified mycotoxin conversion to its free form may result in a potential risk to human and animal health. This review aims to update information on the formation, detection, occurrence, and toxic effects caused by modified mycotoxin.