The wide applications of graphene materials require the thorough investigation on their biosafety and environmental risks. Transformation of graphene materials is a fundamental issue in their environmental risk evaluations. The enzymatic degradation of graphene is widely reported using peroxidases, but the information on the fungal transformation of graphene is still unavailable. Herein, we incubated reduced graphene oxide (RGO) in the white rot fungus Phanerochaete chrysosporium culture system for 4 weeks and investigated the transformation of RGO by multiple techniques. P. chrysosporium efficiently added oxygen to RGO and decreased the its carbon contents accordingly. The I_D/I_G ratios of RGO showed statistically increases upon the transformation by P. chrysosporium according to Raman spectroscopy, suggesting the increase of defects on carbon skeleton. The negatively charged oxygen containing groups exfoliated the graphene sheets as indicated by the larger layer distance according to the X-ray diffraction spectra and the increased roughness under scanning electron microscopy. The transformation was more obvious in the RGO separated from the fungal balls than the precipitates in the culture medium. The mechanism of transformation was attributed to the enzymatic degradation by P. chrysosporium. The environmental implication of the fungal transformation of graphene materials and the potential of using fungi to reduce the environmental risks of graphene materials are discussed.