Topical diclofenac gels are frequently applied on human skin and, consequently are exposed to sunlight during outdoor activities. The degradation of diclofenac (DCF) with sunlight exposure is known to occur but the detailed transformation characteristics and biological concerns have not been comprehensively investigated. In the present work, the transformation products during diclofenac photolysis were identified with the aid of ultra-performance liquid chromatography coupled with triple time-of-flight mass spectrometry (UPLC-TripleTOF). Biological concerns, including microtoxicity, genotoxicity, cytotoxicity and antiestrogenicity were examined with multiple in-vitro bioassays. Spearman correlation analysis was conducted to obtain further insight into the contributions of photolysis products to overall biological concerns. The results demonstrated that diclofenac was readily degraded under sunlight to form five main photolysis products via substitution, dechlorination, dehydroxylation, homodimerization and heterodimerization. Products P1, P2 and P5 were reported previously, while two dimer products (P3 and P4) are innovative products and have not been found in prior studies. A significant elevation in the microtoxicity was found during the photolysis of diclofenac, resulting mainly from the carbazole-containing photolysis products P2, P3, P4 and P5. Genotoxicity and antiestrogenicity declined along with the reduction of diclofenac, indicating that no photolysis products were genotoxic or anti-estrogenic. Modest cytotoxicity to the human skin epidermis cell line was observed and attributed to the formation of intermediate species. This outcome highlighted the biological concerns of diclofenac to human health when exposed to sunlight.