This study explores aflatoxin B1 (AFB1) degradation by salt tolerant Tetragenococcus halophilus CGMCC 3792 (T. halophilus CGMCC 3792). Six non-toxic degradation products of AFB1 were identified by liquid chromatography/time-of-flight mass spectrometry (LC/TOF-MS), including m/z 243.06 (C14H10O4), 361.09 (C18H16O8), 229.09 (C14H12O3), 277.14 (C16H20O4), 217.12 (C14H16O2), 221.15 (C14H20O2). Two pathways were proposed based on molecular formulas and MS/MS spectra, and the final degradation product was m/z 221.15 (C14H20O2). The degradation ratio of active cell component (66%) and intracellular component (57%) was significantly higher than extracellular component (14%). AFB1 degradation ratio of intracellular component, initially at around 60%, was decreased to 32% after proteinase K treatment, and to 7% after heating, to 9% after proteinase K plus SDS treatment, and to 16% after TFA treatment. It suggests that the AFB1 removal mainly resulted from enzyme biodegradation. The degradation ratio was 92% in AFB1 polluted soy sauce mash. The high degradation ratio of AFB1 by T. halophilus CGMCC 3792 indicates its great potential for application in oriental fermentation condiment process.