Monascus purpureus, a pigment-producing ascomycetous fungus, has been traditionally used for red rice preparation using solid-state fermentation. The objective of this study was to develop an improved pigment-producing strain of M. purpureus MTCC 1090 through genome shuffling followed by detailed analytical estimations of pigments and other bioactive compounds produced by the fusant. Protoplast formation was optimum with 12 h-old mycelia incubated at 30 degrees C with cellulase, lyticase, and chitinase (40:1:1) for 5 h. Four UV-induced mutants that produced 13.1-39.5% higher amount of yellow, orange, and red pigments in fermented low-grade (cheap) broken rice were used as parents for genome shuffling. After the first round of fusion, four fusants with 35.9-60.52% higher pigment production capabilities were fused again, and finally the fusant F2-19 with distinct culture characteristic was selected under multi-selection pressure. It consistently produced 67%, 70%, and 76% higher content of yellow, orange, and red pigments respectively as compared to the wild-type. High-performance liquid chromatography (HPLC) analysis also reveals clear variation in pigment productions between wild-type and the fusant. Furthermore, HPLC analysis of F2-19 fermented rice extract confirms the production of 186 +/- 8.71 and 3810 +/- 29.81 mg/kg mevinolin and gamma-aminobutyric acid respectively. Citrinin was not detected. F2-19 fermented rice also has high antioxidant activity (7.92 +/- 0.32 mg/g trolox equivalent), with good amount of phenolics (18.0 +/- 0.95 mg/g gallic acid equivalent) and flavonoids (2.7 +/- 0.26 mg/g quercetin equivalent). Thus, genome shuffling was successfully implemented on M. purpureus for the first time to develop a citrinin-free, better-performing fusant that holds future biotechnological potential. Key points Genome shuffling was performed by recursive protoplast fusion in Monascus purpureus. The selected fusant, F2-19, was used in solid-state fermentation using low-grade rice. It produced 67-76% higher content of yellow, orange, and red pigments than the wild-type. HPLC detected 186 mg/kg mevinolin and 3810 mg/kg gamma-aminobutyric acid, but no citrinin. F2-19 shows high antioxidant activity with good amount of phenolics and flavonoids.