Per- and polyfluoroalkyl substances (PFAS), such as perfluorooctanesulfonic acid (PFOS), 6:2 fluorotelomer sulfonic acid (6:2 FTSA), and 6:2 fluorotelomer amido betaine (6:2 FTAB), are environmentally persistent contaminants with significant ecological and health concerns due to their bioaccumulation and toxicity. This study investigates the fungal degradation and defluorination of PFOS, 6:2 FTSA, and 6:2 FTAB by the fungus Cunninghamella elegans. Resulting degradative metabolites were analyzed using gas chromatography-mass spectrometry (GC-MS) and liquid chromatography-mass spectrometry (LC-MS). Detected transformation products included perfluorohexanoic acid (PFHxA), perfluoroheptanoic acid (PFHpA), perfluorooctanoic acid (PFOA), and 5:3 fluorotelomer carboxylic acid (5:3 FTCA), indicating active transformation of long- and short-chain PFAS. Fluoride ion release, measured by a fluoride ion-selective electrode and fluorine nuclear magnetic resonance (¹⁹F NMR), confirmed partial defluorination. To evaluate the ecological relevance of fungal treatment, toxicity assays were performed using Danio rerio (zebrafish) embryos, Daphnia magna, and Aliivibrio fischeri. Results demonstrated significantly reduced toxicity in PFAS-treated samples post-fungal degradation across all models, suggesting a detoxification effect linked to metabolite formation. This multi-tiered approach highlights the potential of C. elegans as a promising agent for PFAS bioremediation and provides new insights into microbial degradation pathways and their implications for environmental safety.