Abstract Bi4O5Br2 with irregular flake shape was synthesized by a facile and energy-saving hydrolysis method. Its band gap energy (Eg) was 2.1 eV. The formation mechanism was proposed. The Bi4O5Br2 exhibited superb visible-light-induced photocatalytic activity (>90%) toward the oxidation of carbamazepine. The kinetics rate constant (k) attained 0.0196 min−1. The effect of Bi4O5Br2 dosage, initial solution pH value, and inorganic anions on carbamazepine degradation was investigated. During the oxidation process, photogenerated holes (h+) and superoxide radical anions (•O2−) were the main active species. Based on the reaction intermediates results determined through a combined system of liquid chromatography and mass spectrometry, a possible reaction mechanism was speculated. The degree of contamination of carbamazepine solution after treatment was evaluated through the teratogenic effect experiment. After 120 min of visible light exposure, the carbamazepine solution is free of pollution. Also, the as-synthesized Bi4O5Br2 maintains good chemical stability and could be reused in the photodegradation process, indicating its potential in practical applications.