Extracellular lignin peroxidase (LiP) was not detected during decoloration of the azo dye, Amaranth, by Trametes versicolor. Approximately twice as much laccase and manganese peroxidase (MnP) was produced by decolorizing cultures compared to when no dye was added. At a low Mn2+ concentration (3 mu M), N-limited (1.2 mM NH4+) cultures decolorized eight successive additions of Amaranth with no visible sorption to the mycelial biomass. At higher Mn2+ concentrations (200 mu M), production of MnP increased and that of laccase decreased, but the rate or number of successive Amaranth decolorations was unaffected. There was always a 6-h to 8-h lag prior to decoloration of the first aliquot of Amaranth, regardless of MnP and laccase concentrations. Although nitrogen-rich (12 mM NH4+) cultures at an initial concentration of 200 mu M Mn2+ produced high laccase and MnP levels, only three additions of Amaranth were decolorized, and substantial mycelial sorption of the dye occurred. While the results did not preclude roles for MnP and laccase, extracellular MnP and laccase alone were insufficient for decoloration. The cell-free supernatant did not decolorize Amaranth, but the mycelial biomass separated from the whole broth and resuspended in fresh medium did. This indicates the involvement of a mycelial-bound, lignolytic enzyme or a H2O2-generating mechanism in the cell wall. Nitrogen limitation was required for the expression of this activity.