The stem bark of Toxicodendron vernicifluum (TVSB) has been widely used as a traditional herbal medicine and food ingredients in Korea. However, its application has been restricted due to its potential to cause allergies. Moreover, there is limited data available on the qualitative and quantitative changes in the composition of its phytochemicals during fermentation. Although the Formitella fraxinea-mediated fermentation method has been reported as an effective detoxification tool, changes to its bioactive components and the antioxidant activity that takes place during its fermentation process have not yet been fully elucidated. This study aimed to investigate the dynamic changes of urushiols, bioactive compounds, and antioxidant properties during the fermentation of TVSB by mushroom F. fraxinea. The contents of urushiols, total polyphenols, and individual flavonoids (fisetin, fustin, sulfuretin, and butein) and 1,2,3,4,6-penta-O-galloyl-β-D-glucose (PGG) significantly decreased during the first 10 days of fermentation, with only a slight decrease thereafter until 22 days. Free radical scavenging activities using 2,2-diphenyl-1-picrylhydrazyl (DPPH), 2,2′-azino-bis(3-ethylbenzothiazoline-6- sulfonic acid) (ABTS), and ferric reducing/antioxidant power (FRAP) as an antioxidant function also decreased significantly during the first six to nine days of fermentation followed by a gentle decrease up until 22 days. These findings can be helpful in optimizing the F. fraxinea–mediated fermentation process of TVSB and developing functional foods with reduced allergy using fermented TVSB.