Lentinus squarrosulus, a white-rot Basidiomycete, produces versatile peroxidase under nutrient-limiting conditions. This study was undertaken to enhance the yield of versatile peroxidase from the fungus by optimizing the physiological factors of nutrients and their concentration, inducers, temperature, and pH. Optimal medium was devised using a central composite design – response surface methodology and experimental validation. The fungus produced high levels of versatile peroxidase at a C:N ratio of approximately 100, temperature of 35 °C, and initial pH of 7. Immobilization of Lentinus squarrosulus on inert polyurethane foam (PUF) with optimized medium for production enhanced the versatile peroxidase yield multifold. Maximal yield of versatile peroxidase achieved through optimization and immobilization strategies was 116 U/mL. Efficacy of crude versatile peroxidase on aromatics degradation was illustrated through Fourier transform infrared analysis. The results demonstrated the improvised yield of versatile peroxidase from Lentinus squarrosulus and its efficiency in delignification of crop residues, substantiating the role of this enzyme in biotechnological applications especially for enriching ruminant feed.