The promising potentials of biocatalytic treatment processes in the removal of micropollutants whilst eliminating health and environmental hazards have attracted great attention in recent years. This current work investigated the biotransformation efficiency of a novel laccase from Xylaria polymorpha (XPL) in comparison with commercial laccases from Trametes versicolor (TVL) and Aspergillus sp. (ASL). XPL exhibited better oxidation performance (95.7%) on AMX than TVL (92.8%) and ASL (90.5%). Optimization of operational conditions revealed that AMX was best oxidized at pH 5, temperature (30 °C), and concentration (1.0 mg L ⁻¹). The investigation carried out to determine the effect of redox mediators revealed violuric acid (VLA) as the best redox mediator. The laccase stability experiments elucidated that the oxidation of AMX is time and mediator concentration dependent with ABTS exhibiting highest deactivation of XPL active sites. Two metabolic products; amoxicillin penilloic acid and 5-hydroxy-6-(4-hydroxyphenyl)− 3-(1,3-thiazolidin-2-yl)piperazin-2-one of AMX were obtained through Liquid Chromatography-Mass Spectrometry (LC-MS) analyses. The toxicity assessments carried out after oxidation of AMX by XPL showed 94% and 97% reduced toxicity on Artemia salina and Aliivibrio fischeri respectively. The study further underscored the efficiency of biocatalytic-mediator technology in the transformation of complex micropollutants into less toxic substances in an eco-friendly way.