The ligninolytic system from the fungi Trametes villosa and Panus crinitus can efficiently degrade all fractions of different molecular mass contained in El-bleaching effluent, but with different degradation rates. The lower-molecular-mass (MM) materials were better characterized when the elution in the size-exclusion high-performance liquid chromatography were monitored at 210 than at 280 nm, which indicates that these compounds may be ring cleavage byproducts from depolymerized chlorolignin. The biodegraton of E-1 effluent by both fungi was a multistage process, involving an initial chemical modification of the higher-MM compounds and concomitant oxidation of the lower-MM materials. A subsequent depolymerization of chemically modified polymeric lignin-like compounds also took place. Each stage may require one or several different enzymes. The results suggested that laccase was involved in the initial stage.