Phosphogypsum (PG) is a common chemical by-product from wet process phosphoric acid production, accumulated stockpiles of 300 million tons in China. The challenge for the comprehensive utilization of PG is thorough removal of phosphorus and organic contaminants from PG, which inevitably entails the loss of overall whiteness and limits its utilization in building materials and other fields. This work investigated the speciation of phosphorus and organic contaminants in PG by FTIR spectroscopy, Raman spectroscopy, XRD, SEM-EDS and GC-MS. On this basis, by using K2S2O8 as a mineralizer, PG was transformed into anhydrous calcium sulfate powder and the organic contaminants were fully decomposed (removal rate >80%, with residual TOC of 0.078%) under hydrothermal treatment. Under optimal hydrothermal conditions (0.3 M K2S2O8, heated at 120 °C for 12 h), the whiteness of product significantly improved from 40.9 to 97 and effective removal of phosphorus was achieved (more than 76%). The residual phosphorus in treated PG was 0.108%, which met the standard of PG as a building material in China GB/T-23456 2018 (P content < 0.2%). The mechanism study revealed that the phase transformation of calcium sulfate from dihydrate to anhydrous played a dominant role in the removal of phosphorus, H+ and SO42- from K2S2O8 decomposition facilitated the dissolution-recrystallization process of calcium sulfate, allowing the phosphorus in the lattice to escape. In addition, by thermal activation, K2S2O8 generated free radicals of SO4•- and OH• dissipated the organic contaminants in PG. This work provides theoretical and practical bases for the harmless disposal and resource recycling of industrial by-product gypsum, and it is of great significance to build the "zero-waste city".