Once released into the environment, engineered nanomaterials may be transformed by microbially mediated redox processes altering their toxicity and fate. Little information currently exists on engineered nanomaterial transformation under environmentally relevant conditions. Here, we report the development of an in vitro biomimetic assay for investigation of nanomaterial transformation under simulated oxidative environmental conditions. The assay is based on the extracellular hydroquinone-driven Fenton's reaction used by lignolytic fungi. We demonstrate the utility of the assay using CdSe(core)/ZnS(shell) quantum dots (QDs) functionalized with poly(ethylene glycol). QD transformation was assessed by UV-visible spectroscopy, inductively coupled plasma-optical emission spectroscopy, dynamic light scattering, transmission electron microscopy (TEM), and energy dispersive X-ray spectroscopy (EDX). QDs were readily degraded under simulated oxidative environmental conditions: the ZnS shell eroded and cadmium was released from the QD core. TEM, electron diffraction analysis, and EDX of transformed QDs revealed formation of amorphous Se aggregates. The biomimetic hydroquinone-driven Fenton's reaction degraded QDs to a larger extent than did H202 and classical Fenton's reagent (H2O2 + Fe2+). This assay provides a new method to characterize transformations of nanoscale materials expected to occur under oxidative environmental conditions.