The reduction of color and adsorbable organic halides (AOX) from the kraft bleach plant effluents was investigated using a laboratory-scale fungal bioreactor. The fungal bioreactor, containing calcium-alginate-entrapped white-rot fungas Trametes versicolor, was developed and evaluated for continuous color and AOX reduction. A color reduction percentage of 69% (+/-6%) and AOX reduction percentage of 58% (+/-6%) were achieved using caustic stage effluent as bioreactor feed at a residence time of 1 day. Retention time, inlet liquor concentration and fungal bead size were investigated for their effect on biodegradation. Percentage reductions for their effect on biodegradation. Percentage reductions of color and AOX ranging from 61%(+/-5%) to 72%(+/-2%) and 54%(+/-4%) to 49%(+/-2%), respectively, were observed using combined (caustic and acidic stages) effluent as bioreactor feed. Scanning electron microscopy studies showed that the immobolized mycelia was localized to a limited thickness near the outer surface of the polymer bead. (C) 1997 Elsevier Science Ltd.