Biochemical monomer upcycling of plastic waste and its conversion into value-added products is deemed necessary, as it provides a greener and more sustainable solution to plastic waste management. In the current study, the polystyrene (PS) biodegradation potential of the fungus Phanerochaete chrysosporium NA3 was evaluated using various analytical techniques, such as Fourier transform infrared spectroscopy (FTIR), scanning electron microscopy (SEM), gel permeation chromatography (GPC), and high-performance liquid chromatography (HPLC). The biodegradation capacity of the fungal strain was further evaluated using a carbon dioxide (CO2) evolution test, which showed that the PS films treated with NA3 produced more CO2, indicating the strain’s ability to successfully utilize PS as a carbon source. The FTIR analysis of the PS films treated with NA3 showed modifications in the polymer chemical structure, including the formation of carbonyl and hydroxyl groups, which suggests the enzymatic dissociation of the polymer and the associated biodegradation mechanism. Pretreatments were found to be effective in modifying the polymer’s properties, making it more susceptible to microbial degradation, thus further accelerating the biodegradation process. The current study strongly advocates that P. chrysosporium (NA3) can be effectively used for the biochemical monomer recovery of PS waste and could be further utilized in the upcycling of plastic waste for its conversion into value-added products under the concept of circular economy.