To decrease the load of pharmaceuticals to the environment, decentralized wastewater treatment has been proposed for important point-sources such as hospitals. In this study, a microbial electrolysis cell (MEC) was used for the dehalogenation of the iodinated X-ray contrast medium diatrizoate. The presence of biogenic palladium nanoparticles (bio-Pd) in the cathode significantly enhanced diatrizoate removal by direct electrochemical reduction and by reductive catalysis using the H(2) gas produced at the cathode of the MEC. Complete deiodination of 3.3 µM (2 mg L(-1)) diatrizoate from a synthetic medium was achieved after 24 h of recirculation at an applied voltage of -0.4 V. An equimolar amount of the deiodinated metabolite 3,5-diacetamidobenzoate (DAB) was detected. Higher cell voltages increased the dehalogenation rates, resulting in a complete removal after 2 h at -0.8 V. At this cell voltage, the MEC was also able to remove 85% of diatrizoate from hospital effluent containing 0.5 µM (292 µg L(-1)), after 24 h of recirculation. Complete removal was obtained when the effluent was continuously fed at a volumetric loading rate of 204 mg diatrizoate m(-3) total cathodic compartment (TCC) day(-1) to the MEC with a hydraulic retention time of 8 h. At -0.8 V, the MEC system could also eliminate 54% of diatrizoate from spiked urine during a 24 h recirculation experiment. The final product DAB was demonstrated to be removable by nitrifying biomass, which suggests that the combination of a MEC and bio-Pd in its cathode offers potential to dehalogenate pharmaceuticals, and to significantly lower the environmental burden of hospital waste streams.