Laccase-catalyzed degradation of a broad spectrum of trace organic contaminants (TrOCs) by a membrane distillation (MD)-enzymatic membrane bioreactor (EMBR) was investigated. The MD component effectively retained TrOCs (94–99%) in the EMBR, facilitating their continuous biocatalytic degradation. Notably, the extent of TrOC degradation was strongly influenced by their molecular properties. A significant degradation (above 90%) of TrOCs containing strong electron donating functional groups (e.g., hydroxyl and amine groups) was achieved, while a moderate removal was observed for TrOCs containing electron withdrawing functional groups (e.g., amide and halogen groups). Separate addition of two redox-mediators, namely syringaldehyde and violuric acid, further improved TrOC degradation by laccase. However, a mixture of both showed a reduced performance for a few pharmaceuticals such as primidone, carbamazepine and ibuprofen. Mediator addition increased the toxicity of the media in the enzymatic bioreactor, but the membrane permeate (i.e., final effluent) was non-toxic, suggesting an added advantage of coupling MD with EMBR.