The occurrence and fate of the popular pharmaceutical gabapentin (GBP) in the urban water cycle were investigated with a focus on its transformation during water chlorination. GBP was detected in all samples with average concentrations of 1285 ng/L (n = 24) for wastewater effluent, 304 ng/L for river water (n = 22), and 180 ng/L for drinking water treatment plant (DWTP) influent (n = 4). The monitoring sites were located in the Nakdong River watershed, Korea. GBP was rapidly (within 20 min) transformed into 1-cyanocyclohexylacetic acid (GBP-nitrile) under typical chlorination conditions (1.4 mgCl2/L). When there was a molar excess of chlorine to GBP, the primary amine of GBP was double-chlorinated to form N-Cl2 GBP with a second-order rate constant of >103 M−1 s−1. Decomposition of N-Cl2 GBP had a first-order rate constant of (0.5–1.0) × 10−2 s−1 and produced GBP-nitrile with a yield of 87%–100%. We propose that N-Cl2 GBP is transformed into N-Cl GBP imine and then to GBP-nitrile via two consecutive dehydrochlorinations with the former as the rate-limiting step. N-Cl2 GBP had a much higher decomposition rate than N-Cl2 produced from other simple aliphatic amines, which could be related to the structural features of GBP such as its carboxyl group and quaternary β-carbon. The wastewater effluent samples did not contain GBP-nitrile even in the chlorinated effluent because of the relatively low chlorine dose or high ammonia level. In a full-scale DWTP employing a pre-chlorination unit, GBP present in the influent river water was fully transformed into GBP-nitrile. The formed GBP-nitrile was degraded in subsequent ozonation (•OH oxidation) and biological activated carbon filtration (biodegradation) processes. The toxicity of GBP-nitrile is thought to be low but further studies are warranted to assess the toxicological relevance of nitrile formation during water chlorination.