Docynia indica is used as a plant resource for both medicine and food in minority areas of southwestern China and Southeast of Asia, especially Docynia indica leaves, which are often used as a kind of functional tea in daily life. In our previous research, it has found that D. indica is rich in polyphenols (mainly phlorizin (PHZ)). Although PHZ is the first polyphenolic competitive inhibitor of sodium-dependent glucose transporters (SGLTs) to be discovered, the promotion and application of PHZ are limited due to its extremely low bioavailability. As a kind of aglycons, phloretin (PHT) possesses a better bioavailability and bioactivity than PHZ. Therefore, the conversion of PHZ to PHT in D. indica leaves by the method of biotransformation can be applied to solve the above issue. In this study, Aspergillus niger and Eurotium cristatum were used to transform PHZ to PHT in D. indica. Compared with Aspergillus niger, Eurotium cristatum can cause the equimolar conversion of PHZ to PHT. However, Aspergillus niger resulted in the complete degradation of PHZ. In the process of deep fermentation, PHZ in D. indica leaves was gradually biotransformed into PHT, and its content was as high as ~ 12% after fermentation. With the increase of PHT content, the antioxidant and antibacterial activity of Docynia indica leaves increased. By the acute toxicity evaluation, it was confirmed that Docynia indica leaves and Eurotium cristatum fermented leaves were much safer. These results indicate that Eurotium cristatum fermentation has the ability to transform the functional compounds in Docynia indica leaves and increase the antioxidant and antibacterial activity of Docynia indica, thus making it a substitute for PHT and functional tea.