Perfluoroalkyl acids (PFAAs) are widely used in industrial production and daily life because of their unique physicochemical properties, such as their hydrophobicity, oleophobicity, surface activity, and thermal stability. Perfluorosulfonic acids (PFSAs) and perfluorocarboxylic acids (PFCAs) are the most studied PFAAs due to their global occurrence. PFAAs are environmentally persistent, toxic, and the long-chain homologs are also bioaccumulative. Exposure to PFAAs may arise directly from emission or indirectly via the environmental release and degradation of PFAA precursors. Precursors themselves or their conversion intermediates can present deleterious effects, including hepatotoxicity, reproductive toxicity, developmental toxicity, and genetic toxicity. Therefore, exposure to PFAA precursors constitutes a potential hazard for environmental contamination. In order to comprehensively evaluate the environmental fate and effects of PFAA precursors and their connection with PFSAs and PFCAs, we review environmental biodegradability studies carried out with microbial strains, activated sludge, plants, and earthworms over the past decade. In particular, we review perfluorooctyl-sulfonamide-based precursors, including perfluroooctane sulfonamide (FOSA) and its N-ethyl derivative (EtFOSA), N-ethyl perfluorooctane sulfonamido ethanol (EtFOSE), and EtFOSE-based phosphate diester (DiSAmPAP). Fluorotelomerization-based precursors are also reviewed, including fluorotelomer alcohols (FTOH), fluorotelomer sulfonates (FTSA), and a suite of their transformation products. Though limited information is currently available on zwitterionic PFAS precursors, a preliminary review of data available for 6:2 fluorotelomer sulfonamide betaine (FTAB) was also conducted. Furthermore, we update and refine the recent knowledge on biotransformation strategies with a focus on metabolic pathways and mechanisms involved in the biotransformation of PFAA precursors. The biotransformation of PFAA precursors mainly involves the cleavage of carbon-fluorine (C-F) bonds and the degradation of non-fluorinated functional groups via oxidation, dealkylation, and defluorination to form shorter-chained PFAAs. Based on the existing research, the current problems and future research directions on the biotransformation of PFAA precursors are proposed.