Our experiments revealed that a few natural and synthetic estrogens can be effectively transformed through reactions that are mediated by lignin peroxidase (LiP), an extracellular enzyme that is produced by a white rot fungus Phanerochaete chrysosporium and is widely present in soil. We systematically assessed the reaction efficiencies at varying important conditions and identified the reaction products using Mass Spectrometry. In particular, we compared the reaction behaviors for systems variously containing natural organic matter and/or veratryl alcohol, a secondary metabolite that P. chrysosporium produces along with LiP in nature to play a role in mediating LiP activity. Based on the observed reaction behaviors and the molecular characteristics of the substrates and the enzyme, we postulate that the active binding site for estrogens is located within the LiP heme cavity while that for veratryl alcohol is on the enzyme surface. Our study suggests that the processes mediated by LiP and other naturally occurring enzymes of similar nature may influence the environmental transformation and fate of estrogen contaminants. The findings in this study provide useful information for understanding LiP-mediated estrogen reactions and for potential development of novel enzymatic method to control estrogen contamination.