Flavodon flavus (Klotzsch) Ryvarden, a basidiomycete (NIOCC strain 312) isolated from decomposing leaves of a sea grass. decolorized pigments in molasses spent wash (MSW) by 80% after 8 days of incubation, when used at concentrations of 10% and 50%. Decolorizing activity was also present in media prepared with half-strength seawater (equivalent to 15 ppt salinity). Decolorizing activity was seen in low-nitrogen medium, nutrient-rich medium and in sugarcane bagasse medium. The percentage decolorization of MSW was highest when glucose or sucrose was used as the carbon source in the low-nitrogen medium. The production of lignin-modifying enzymes, manganese-dependent peroxidase (MNP) and laccase decreased in a medium containing MSW. MNP production and MSW decolorization were inversely correlated. suggesting no role for MNP in MSW decolorization. The decolorization of MSW was not effective when F:flavus was immobilized in calcium alginate beads. Decolorization was achieved best in oxygenated cultures. Besides color, total phenolics and chemical oxygen demand were reduced by 50% in MSW treated with E flavus. suggesting its potential in the bioremediation of effluents.