What happens to drugs in the chlorinating environment? Degradation products may vary in pharmacological profiles and in ecotoxicity potentials compared to the parent compound. This study combines synthesis, NMR spectroscopy, quantum chemical calculations, and toxicity experiments on Daphnia magna to investigate chemical fate of antineoplastic drug 5-fluorouracil (5-FU) in chlorinated environment, which is common in waste-water treatment procedures, but also endogenous in activated neutrophils. A reduction of toxicity (EC50 after 48 h is 50% higher than for the parent 5-FU) was observed after the first chlorination step, in which a chlorohydrin 5-chloro-5-fluoro-6-hydroxy-5,6-dihydrouracil was formed. Further chlorination leads to N-chlorinated intermediate, that undergoes the pyrimidine ring opening reaction. The final product, 2-chloro-2-fluoro-3,3-dihydroxypropanoic acid was obtained after the loss of the chlorinated urea fragment. This is the most potent compound in the reaction sequence, with toxicity parameter EC50, after 48 h, more than twice lower compared to the parent 5-FU. Clearly, the contact time between chlorinating species and degradation products provide different ecotoxicological properties of reaction mixtures. Interplay between experimental and theoretical procedures, to properly describe reaction pathways and provide more information on toxicity profiles, is a way forward in environmental science research.