The bulky phenolic compound tetrabromobisphenol A (TBBPA) is a brominated flame retardant used in a wide range of products; however, it diffuses into the environment, and has been reported to have toxic effects. Although it is well-known that white-rot fungi degrade TBBPA through ligninolytic enzymes, no other metabolic enzymes have yet been identified, and the toxicity of the reaction products and their risks have not yet been examined. We found that the white-rot fungus Phanerochaete sordida YK-624 converted TBBPA to TBBPA-O-β-D-glucopyranoside when grown under non-ligninolytic-enzyme-producing conditions. The metabolite showed less cytotoxicity and mitochondrial toxicity than TBBPA in neuroblastoma cells. From molecular biological and genetic engineering experiments, two P. sordida glycosyltransferases (PsGT1c and PsGT1e) that catalyze the glycosylation of TBBPA were newly identified; these enzymes showed dramatically different glycosylation activities for TBBPA and bisphenol A. The results of computational analyses indicated that the difference in substrate specificity is likely due to differences in the structure of the substrate-binding pocket. It appears that P. sordida YK-624 takes up TBBPA, and reduces its cytotoxicity via these glycosyltransferases.