The presence and release of 1,4-dioxane to groundwater from onsite-wastewater treatment systems (OWTS), which represent 25% of the total wastewater treatment in the U.S., has not been studied to date. In this study we monitored 1,4-dioxane in six septic tank effluents (STE) and receiving OWTS installed at residences on Long Island (LI), NY, for a period of 15 months. We specifically evaluated the performance of Nitrogen Removing Biofilters (NRBs) as an innovative/alternative-OWTS, consisting of a top sand layer and a bottom woodchip/sand layer, to simultaneously remove nitrogen and 1,4-dioxane. 1,4-Dioxane levels in STE (mean: 1.49 μg L; range: 0.07-8.45 μg L; n = 37) were on average > 15 times higher than tap water from these residences, demonstrating that 1,4-dioxane primarily originated from the use of household products. NRBs were effective in removing both 1,4-dioxane and total nitrogen with an overall removal efficiency of 56 ± 20% and 88 ± 12%, respectively. The majority of 1,4-dioxane removal (~80%) occurred in the top oxic layer of the NRBs. The detection of functional genes (dxmB, prmA, and thmA), which encode for metabolic and co-metabolic 1,4-dioxane degradation, in NRBs provides the first field evidence of aerobic microbial degradation of 1,4-dioxane occurring in a wastewater system. Given that there are ~500,000 conventional OWTS on LI, the 1,4-dioxane discharge to groundwater from residential wastewater was estimated at 195 ± 205 kg yr , suggesting high risk of contamination to shallow aquifers. The results also demonstrate that installation of NRBs can reduce 1,4-dioxane to levels even lower than the NY State drinking water standard of 1 μg L.