Most pharmaceutical compounds undergo a structural change in the bodies of humans and animals before excretion, resulting in metabolites. After their excretion and introduction into the environment, both parent compounds and metabolites can undergo structural changes by a variety of biotic and abiotic processes. Structural transformations may also be a result of technological processes, such as effluent treatment by photolysis and advanced oxidation, which result in new chemical entities with new properties. The objective of this chapter is to present the insight and new knowledge recently obtained by studies on the fate and effects of pharmaceuticals' metabolites and their transformation products in the aquatic environment. Emphasis is on bio‐ and photo‐transformation products formed in the presence of such compounds in the sewage treatment plants and the aquatic environment while the challenges related to their ecological risk are also discussed.