Decolorization of molasses wastewater (MWW) from an ethanolic fermentation plant by Phanerochaete chrysosporium was studied. By diluting MWW properly (10%v/v) and incubating it with an appropriate concentration of the spores (2.5 · 10 6 /ml), extensive decolorization occurred (75%) on day 5 of the incubation. The colour removal ability was found to be correlated to the activity of ligninolytic enzyme system: lignin peroxidase (LiP) activity was 185 U/l while manganese peroxidase (MnP) activity equaled 25 U/l. Effects of some selected operating variables were studied: manganese(II), veratryl alcohol (VA), glucose as a carbon source and urea and ammonium nitrate, each as a source of nitrogen. Results showed that the colour reduction and LiP activity were highest (76% and 186 U/l, respectively) either when no Mn(II) was added or added at the lowest level tested (0.16 mg/l to provide 0.3 mg/l). Activity of MnP was highest (25 U/l) when Mn(II) added to the diluted MWW at the highest level (100 ppm) while activity of LiP was lowest (7.1 U/l) at this level of added Mn(II). The colour reduction in the presence of the added VA was shown to be little less than in its absence (70 vs. 75%). When urea as an organic source of nitrogen for the fungus, was added to the MWW, the decolorizing activity of P. chrysosporium decreased significantly (15 vs. 75%) and no activities were detected for LiP and MnP. Use of ammonium nitrate as an inorganic source of nitrogen did not show such a decelerating effects, although no improvements in the metabolic behavior of the fungus (i.e., LiP and MnP activities) deaccelerating was observed. Effects of addition of glucose was also discussed.