Cyclophosphamide (CP) is a chemotherapy drug which is widely used in the treatment of neoplastic diseases and have often been detected in urban and hospital wastewater, and surface waters. However, at present the effects of CP on aquatic organisms and ecosystems are poorly understood. The main objective of the present study was to assess the effect of CP on the structure and functioning of a sub-tropical freshwater ecosystem (macroinvertebrates, zooplankton and phytoplankton) at environmental relevant concentrations. CP (0, 0.5, 5 and 50 μg/L) was applied weekly to 13,600 L mesocosms over a period of four weeks followed by a one month post exposure period. CP was found to dissipate much faster than previous reported in literature and the half-dissipation times were treatment dependent, being 2.2, 21.3 and 23.6 days in the lowest, middle and highest treatments respectively. Only treatment related effects were observed on the community structure at individual samplings with zooplankton (NOECcommunity = 0.5 μg/L) responding at lower concentrations than phytoplankton (NOECcommunity = 5 μg/L) and macroinvertebrates (NOECcommunity ≥ 50 μg/L). The dissolved organic carbon concentration was consistently higher in the 2 highest treatments, indicating a potential effect on food web interactions and/or the microbial loop. At the population level, consistent adverse effects were observed for the plankton taxa Pleuroxus laevis, Dissotrocha sp. and Oscillatoria sp. at all CP concentrations (NOEC <0.5 μg/L). Additionally, at the highest CP treatments 7% of all the taxa showed a clear short-term adverse effect. Based on comparison with literature data it can be concluded that these taxa have the highest CP sensitivity ever recorded and these findings indicate a potential CP risk to aquatic ecosystems at environmental relevant concentrations.