Triphenylmethane dyes belong to the most important group of synthetic colorants and are used extensively in the textile industries for dying cotton, wool, silk, nylon, etc. They are generally considered as the xenobiotic compounds, which are very recalcitrant to biodegradation. Penicillium ochrochloron decolorizes cotton blue (50 mg l(-1)) within 2.5 h under static condition at pH 6.5 and temperature 25 degrees C. TLC, FTIR and HPLC analysis confirms biodegradation of cotton blue. FTIR spectroscopy and GC-MS analysis indicated sulphonamide and triphenylmethane as the final products of cotton blue degradation. The pH, temperature and maturity of biomass affected the rate of decolorization. Presence of lignin peroxidase, tyrosinase and aminopyrine N-demethylase activities in the cell homogenate as well as increase in the extracellular activity of lignin peroxidase suggests the role of these enzymes in the decolorization process. The phytotoxicity and microbial toxicity studies of extracted metabolites suggest the less toxic nature of them. (C) 2008 Elsevier B.V. All rights reserved.