Diclofenac (DCF) is one of the most frequently detected pharmaceuticals in various water samples. This paper studied the effects of aquatic environmental factors (pH, temperature and dissolved organic matter) on photodegradation of DCF under simulated sunlight. The results demonstrate that degradation pathways proceed via pseudo first-order kinetics in all cases and the photodegradation of DCF by simulated sunlight. Thermodynamic study indicated that the photodegradation course is spontaneous, exothermic and irreversible. The rate constant gradually increased when the pH increased from 3 to 5, then decreased when the pH increased from 5 to 8, and finally increased when the pH further increased from 8 to 12. Humic acid inhibited the photodegradation of DCF. Three kinds of main degradation products were observed by high performance liquid chromatography/mass spectrometry and the degradation pathways were suggested. A toxicity test using Photobacterium phosphoreum T3 Sp indicated the generation of some more toxic products than DCF.