Bifenthrin is one the most widespread pollutants and has caused potential effect on aquatic life and human health, yet little is known about microbial degradation in contaminated regions. A novel yeast strain ZS-02, isolated from activated sludge and identified as Candida pelliculosa based on morphology, API test and 18S rDNA gene analysis, was found highly effective in degrading bifenthrin over a wide range of temperatures (20–40°C) and pH (5–9). On the basis of response surface methodology (RSM), the optimal degradation conditions were determined to be 32.3°C and pH 7.2. Under these conditions, the yeast completely metabolized bifenthrin (50 mg·L −1) within 8 days. This strain utilized bifenthrin as the sole carbon source for growth as well as co-metabolized it in the presence of glucose, and tolerated concentrations as high as 600 mg·L −1 with a q max, K s and K i of 1.7015 day −1, 86.2259 mg·L −1 and 187.2340 mg·L −1, respectively. The yeast first degraded bifenthrin by hydrolysis of the carboxylester linkage to produce cyclopropanecarboxylic acid and 2-methyl-3-biphenylyl methanol. Subsequently, 2-methyl-3-biphenylyl methanol was further transformed by biphenyl cleavage to form 4-trifluoromethoxy phenol, 2-chloro-6-fluoro benzylalcohol, and 3,5-dimethoxy phenol, resulting in its detoxification. Eventually, no persistent accumulative product was detected by gas chromatopraphy-mass spectrometry (GC-MS) analysis. This is the first report of a novel pathway of degradation of bifenthrin by hydrolysis of ester linkage and cleavage of biphenyl in a microorganism. Furthermore, strain ZS-02 degraded a variety of pyrethroids including bifenthrin, cyfluthrin, deltamethrin, fenvalerate, cypermethrin, and fenpropathrin. In different contaminated soils introduced with strain ZS-02, 65–75% of the 50 mg·kg −1 bifenthrin was eliminated within 10 days, suggesting the yeast could be a promising candidate for remediation of environments affected by bifenthrin. Finally, this is the first described yeast capable of degrading bifenthrin.