The photochemical degradation of 2-(1-naphthyl) acetamide (NAD) in aqueous solution using simulated sunlight excitation as well as UV light within the 254–300 nm range was investigated to obtain an insight into the transformation mechanism that could occur under environmental conditions. Several photoproducts were identified using HPLC/MS/MS techniques. The degradation quantum yield was found to be independent of the excitation wavelength, but showed a dependence of oxygen concentration. This increased by a factor of approximately 3 from aerated to oxygen-free solutions. There is a clear involvement of both triplet and singlet excited states in NAD photoreactivity. The participation of singlet oxygen as a significant route in NAD degradation was ruled out by comparison with the behavior using Rose Bengal as a photosensitizer. A mechanistic pathway implying hydroxylation process through NAD radical cation species as well as an oxidation reaction by molecular oxygen is proposed. The photochemical behavior of NAD appears to mainly involve the aromatic moieties without any participation of the amide side chain. Toxicity tests clearly show that the generated primary photoproducts are responsible for a significant increase in the toxicity. However, upon prolonged irradiation this toxicity tends to decrease.