A Dyp-type peroxidase enzyme from thermophilic cellulose degrader Thermobifida fusca (TfuDyP) was investigated for catalytic ability towards lignin oxidation. TfuDyP was characterised kinetically against a range of phenolic substrates, and a compound I reaction intermediate was observed via pre-steady state kinetic analysis at max 404 nm. TfuDyP showed reactivity towards Kraft lignin, and was found to oxidise a -aryl ether lignin model compound, forming an oxidised dimer. A crystal structure of TfuDyP was determined, to 1.8Å resolution, which was found to contain a diatomic oxygen ligand bound to the heme centre, positioned close to active site residues Asp-203 and Arg-315. The structure contains two channels providing access to the heme cofactor for organic substrates and hydrogen peroxide. Site-directed mutant D203A showed no activity towards phenolic substrates, but reduced activity towards ABTS, while mutant R315Q showed no activity towards phenolic substrates, nor ABTS.