Eucalyptus bleached kraft pulp production, an important sector of the Brazilian national economy, is responsible for generating large volume, high pollutant load effluents, containing a considerable fraction of recalcitrant organic matter. The objectives of this study were to quantify the biological activity of the effluent from a eucalyptus bleached kraft pulp mill, characterize the nature of compounds responsible for biological activity and assess the effect of ozone treatment on its removal. Primary and secondary effluents were collected bimonthly over the course of one year at a Brazilian bleached eucalypt kraft pulp mill and their pollutant loads (biochemical oxygen demand (BOD), chemical oxygen demand (COD), total organic carbon (TOC), adsorbable organic halogen (AOX), lignin, extractives) and biological activity (acute and chronic toxicity and estrogenic activity) quantified. The effluent studied did not present acute toxicity to Daphnia, but presented the chronic toxicity effects of algal growth inhibition and reduced survival and reproduction in Ceriodaphnia, as well as estrogenic activity. Chronic toxicity and estrogenic activity were reduced but not eliminated during activated sludge biological treatment. The toxicity identification evaluation revealed that lipophilic organic compounds (such as residual lignin, extractives and their byproducts) were responsible for the toxicity and estrogenic activity. Ozone treatment (50 mg/L O(3)) of the secondary effluent eliminated the chronic toxicity and significantly reduced estrogen activity.