Despite increasing interest in fungal remediation systems for the treatment of persistent contaminants, the mechanisms governing fungal transformation of halogenated organic compounds remain poorly resolved. The aim of this study was to determine whether the transformation of halogenated nitrophenols is driven by isolated extracellular enzymes and cofactor-dependent oxidative activity or instead reflects coordinated system-level fungal metabolism. To address this question, we investigated the transformation of 2-chloro-4-nitrophenol (2C4NP) and 5-fluoro-2-nitrophenol (5F2NP) by ascomycete fungi Caldariomyces fumago (C. fumago) and Curvularia sp. under varying nutrient and cofactor conditions. Whole-culture transformation, crude supernatant activity, purified enzyme assays, intracellular detoxification responses, and genome-resolved functional annotation were integrated to evaluate the relative contributions of extracellular and intracellular processes. Transformation was strongly dependent on fungal species, substrate identity, nutrient availability, and cofactor composition. C. fumago achieved complete transformation of 2C4NP and up to 85.3% transformation of 5F2NP, whereas Curvularia sp. exhibited strict Na₃VO₄-dependent transformation of 5F2NP. Crude supernatants retained partial transformation capacity, achieving ~40–45% substrate depletion under conditions supporting whole-culture activity. Purified chloroperoxidase and laccase showed negligible independent activity and did not reproduce whole-culture transformation behavior. Lignin peroxidase activity was consistently induced during contaminant exposure and peaked during periods of maximum transformation. Cytochrome P450 inhibition did not prevent transformation. Baseline glutathione S-transferase activity was detected in both fungi, and comparative genome analysis identified conserved intracellular detoxification-associated enzyme alongside divergent extracellular oxidative enzyme repertoires. Together, these findings demonstrate that transformation of halogenated nitrophenols by fungi cannot be explained by isolated extracellular enzymes alone but is consistent with coordinated extracellular and intracellular system-level metabolism. These findings highlight an underexplored role for integrated fungal metabolic systems in bioremediation and provide a mechanistic basis for developing a scalable fungal platform for treatment of persistent halogenated contaminants.