The bagasse-based paper mill effluent employed for a decolourization study by the white-rot fungus Trametes versicolor contained 2840 colour units and was of pH 7.8. Colour reduction was observed in all the media rested. A high degree of decolourization (40%) by the native effluent microflora was noted on the second day in effluent supplemented with ammonium nitrate and glucose bur uninoculated with the fungus. A maximum colour removal of the order of 60% was achieved on the fourth day of culture in effluent inoculated with T. versicolor after addition of (w/v) 0.175% ammonium nitrate and 1.0% glucose cosubstrate.