In this study, the Cutaneotrichosporon dermatis strain M503 was isolated and could efficiently degrade tetracycline, doxycycline, and chlorotetracyline. The characteristics of tetracycline degradation were investigated under a broad range of cultural conditions. Response surface methodology (RSM) predicted that the highest degradation rate of tetracycline could be obtained under the following conditions: 39.69 °C, pH of 8.79, and inoculum dose of 4.0% (v/v, ~3.5 × 106 cells/mL in the medium). In accordance with the five identified degradation products of tetracycline, two putative degradation pathways, which included the shedding of methyl and amino groups, were proposed. Moreover, the well diffusion method showed that the strain of M503 decreases the antibacterial potency of tetracycline, doxycycline, and chlorotetracycline. These findings proposed a putative mechanism of tetracycline degradation by a fungus strain and contributed to the estimation of the fate of tetracycline in the aquatic environment.