This article studies the ecotoxicity of 3,3′,4′,5-tetrachlorosalicylanilide (TCSA) using different bioassays and examines its fate in activated sludge batch experiments. Despite of the common use of TCSA as chemical uncoupler in wastewater treatment systems and as preservative in several products, limited data has been published for its ecotoxicity, while no information is available for its biodegradation. Among different bioassays, the highest toxicity of TSCA was noticed for Daphna magna (48-h LC50: 0.054 mg L−1), followed by Vibrio fischeri (15-min EC50: 0.392 mg L−1), Lemna minor, (7-d EC50: 5.74 mg L−1) and activated sludge respiration rate (3-h EC50: 31.1 mg L−1). The half-life of TSCA was equal to 7.3 h in biodegradation experiments with activated sludge, while use of mass balances showed that 90% of this compound is expected to be removed in an aerobic activated sludge system, mainly due to biodegradation. A preliminary risk assessment of TSCA using the Risk Quotient methodology showed possible ecological threat in rivers where wastewater is diluted up to 100-fold. Comparison with the structurally similar 5-chloro-2-(2,4-dichlorophenoxy)phenol (triclosan, TCS) showed that both compounds have similar biodegradation potential and seem to cause analogous toxicity to Vibrio fischeri and activated sludge. Specifically, TCS was biodegraded quite rapidly by activated sludge (half-life: 6.2 h), while EC50 values equal to 0.134 mg L−1 and 39.9 mg L−1 were calculated for Vibrio fischeri, and activated sludge respiration rate. Future research should focus on monitoring of TSCA concentrations in the environment and study its effects in long-term toxicity and bioaccumulation tests.