A simple and sensitive method was developed for characterization of two impurities from commercial bendazac lysine eye drops, by using liquid chromatography combined with electrospray ionization and QTOF mass analyzer (LC-ESI-QTOF MS/MS). A known impurity was characterized rapidly by comparison with the retention time and MS/MS data of the reference standard. Based on high resolution mass spectrometry (HRMS) and the nuclear magnetic resonance (NMR), a new impurity, purified by preparative HPLC, was identified as 2-(1,5-dibenzyl-1H-indazol-3-yloxy)acetic acid. In addition, a plausible mechanism for the formation of the impurities was also proposed.