Current research aims to isolate fungal isolates capable of biodegrading Nonylphenol Ethoxylate (NPEOs) from secondary activated sludge. Samples were collected from Zenin wastewater treatment plant, El-Giza, Egypt. Physical and chemical analysis were performed. Screening of microbial isolates capable of degrading Nonylphenol Ethoxylate was performed on basal salts medium with Nonylephenol Ethoxylate as the only carbon source. Quantification of the residual amount of the (NPEOs) was determined by using a liquid chromatography technique. Morphological identification of the most promising fungal isolates degrading NPEOs was performed based on current universal keys, Penicillium database management system and molecular technique 18S rDNA using ITS1 (forward) and ITS4 (reverse) primers. Cytotoxicity test for microbes was performed by using different concentrations of NPEOs. Results revealed that eight microbes were isolated, which achieved the highest percentage of NPEOs biodegradation ( 70 - 80 %) .One novel species named Penicillium chrysogenum was able to biodegrade (NPEOs) (80%). In case of the Penicillium chrysogenum cytotoxic activity against mammalian cells from African green monkey kidney cells was detected under these experimental conditions (CC50) was 46.5 ± 4.8 µg/ml and the inhibitory cytotoxic activity against normal human lung fibroblast cells was detected under these experimental conditions with CC50 was 74.1 ± 6.1 µg/ml.