The white-rot basidiomycete Phanerochaete chrysosporium produces lignin peroxidases (LiPs), a family of extracellular glycosylated heme proteins, as major components of its lignin-degrading system. Up to 15 LiP isozymes, ranging in M(r) values from 38,000 to 43,000, are produced depending on culture conditions and strains employed. Manganese-dependent peroxidases (MnPs) are a second family of extracellular heme proteins produced by P. chrysosporium that are also believed to be important in lignin degradation by this organism. LiP and MnP production is seen during secondary metabolism and is completely suppressed under conditions of excess nitrogen and carbon. Excess Mn(II) in the medium, on the other hand, suppresses LiP production but enhances MnP production. Nitrogen regulation of LiP and MnP production is independent of carbon and Mn(II) regulation. LiP activity is also affected by idiophasic extracellular proteases. Intracellular cAMP levels appear to be important in regulating the production of LiPs and MnPs, although LiP production is affected more than MnP production. Studies on the sequencing and characterization of lip cDNAs and genes of P. chrysosporium have shown that the major LiP isozymes are each encoded by a separate gene. Each lip gene encodes a mature protein that is 343-344 amino acids long, contains 1 putative N-glycosylation site, a number of putative O-glycosylation sites, and is preceded by a 27-28-amino acid leader peptide ending in a Lys-Arg cleavage site. The coding region of each lip gene is interrupted by 8-9 introns (50-63 bp), and the positions of the last two introns appear to be highly conserved. There are substantial differences in the temporal transcription patterns of the major lip genes. The sequence data suggest the presence of three lip gene subfamilies. The genomic DNA of P. chrysosporium strain BKMF-1767 was resolved into 10 chromosomes (genome size of 29 Mb), and that of strain ME-446 into 11 chromosomes (genome size of 32 Mb). The lip genes have been localized to five chromosomes in BKMF-1767 and to four chromosomes in ME-446. DNA transformation studies have reported both integrative and non-integrative transformation in P. chrysosporium.