The widely used antidiabetic drug metformin has become an emerging contaminant of water systems. In a prior study, we demonstrated the marked mammalian toxicity of the disinfection-derived byproducts (DBPs) Y (yellow, C4H6ClN5) and C (colorless, C4H6ClN3), and here assess the distribution, formation, and ecotoxicity of these in Chinese urban water systems. A national tap water assessment showed that metformin and C concentrations were higher in large, dense urban areas and surface water sources than in sparsely populated areas and groundwater sources. Water types' analysis clearly showed that C derived from chlorination of metformin-contaminated water (up to 4308.5 ng/L) circulated from domestic water (0.7–9.7 ng/L) via sewage (2.3 ng/L in effluent) to surface water (0.6–3.5 ng/L). Simulated disinfection and aqueous stability results systematically showed rapid formation and 24 h stability of both byproducts, indicating high exposure odds for water users. Both byproducts showed clear but distinct toxic effects on the growth (72 h IC50, 0.6 mg/L for Y and 4.4 mg/L for C) and photosynthesis of the microalgae Pseudokirchneriella subcapitata at milligram levels. Combinedly, our work reveals that metformin byproducts have been disseminated to urban water cycle and contaminated tap water, increasing potential toxic risk for drinking water. Its outcomes provide a preliminary reference for future studies on the environmental fate and ecotoxicological effects of unintended DBPs formed in the chlorination of metformin-contaminated water.