The objective of this study was to exploit the decolorization potential of a newly isolated white-rot fungus Schizophyllum commune IBL-6 for the biodegradation of reactive textile dye Cibacron Red FN-2BL. In the initial decolorization study of 10 days, it was observed that S. commune IBL-6 was a better decolorizer of Cibacron Red FN-2BL. Various process parameters like composition of basal nutrient medium, pH, temperature, additional carbon and nitrogen sources, and initial dyestuff concentration were optimized to develop an economic decolorization process. The optimum dye decolorization was achieved in basal nutrient medium II containing 0.1% Cibacron Red FN-2BL and supplemented with 1% glucose after 3 days incubation at pH 4.5 and 30 degrees C. All the additional carbon sources were found to enhance decolorization process, whereas most of the nitrogen supplements caused fungal-growth inhibition. The pattern of enzymes involved in the biodegradation of this dye was studied, and manganese peroxidase was found to be the major peroxidase with minor lignin peroxidase and laccase activities.