Aryl alcohol oxidase (AAO) produced by Geotrichum candidum Dec1(Dec1), a newly isolated decolorizing fungus, was purified by ultrafiltration and by using diethylaminoethyl (DEAE) Sephacel, Butyl-Toyopearl and Mono-Q columns. H2O2 produced by concomitant AAO oxidation of veratryl alcohol (VA) to veratraldehyde was consumed by a peroxidase (DyP) purified from Dec1 culture, leading to the decolorization of a dye in vitro. In the liquid culture of Dec1, the existence of H2O2 and veratraldehyde was confirmed during cultivation, when dye-decolorization and AAO activities were maintained. This indicates that VA produced by Dec1 was oxidized by AAO to veratraldehyde, generating H2O2, which supported dye-decolorizing activity of Dec1 in vivo. The prevention of polymerization of DyP oxidation products of a dye in the presence of AAO was shown.