Abstract Microwave discharge plasma in liquid (MDPL) is a new type of water purification technology with a high mass transfer efficiency. It is a kind of low-temperature plasma technology. The reactive species produced by the discharge can efficiently act on the pollutants. To clarify the application prospects of MDPL in water treatment, the discharge performance, practical application, and pollutant degradation mechanism of MDPL were studied in this work. The effects of power, conductivity, pH, and Fe2+ concentration on the amount of reactive species produced by the discharge were explored. The most common and refractory perfluorinated compounds (perfluorooctanoic acid (PFOA) and perfluorooctane sulfonate (PFOS) in water environments are degraded by MDPL technology. The highest defluorination of PFOA was 98.8% and the highest defluorination of PFOS was 92.7%. The energy consumption efficiency of 50% defluorination (G50-F) of PFOA degraded by MDPL is 78.43 mg/kWh, PFOS is 42.19 mg/kWh. The results show that the MDPL technology is more efficient and cleaner for the degradation of perfluorinated compounds. Finally, the reaction path and pollutant degradation mechanisms of MDPL production were analyzed. The results showed that MDPL technology can produce a variety of reactive species and has a good treatment effect for refractory perfluorinated pollutants.