Possible involvement of the non-lysosomal (proteasome-mediated) pathway in the regulation of ligninolytic activities was studied. Proteasome activity was detected in mycelial extracts of the efficient lignin-degrading white rot fungi, Trametes versicolor and Phlebia radiata, by monitoring cleavage of a fluorogenic (7-amido-4-methyl-coumarin-linked) peptide substrate (SucLLVY-MCA). One of the more potent peptide aldehyde inhibitors of the proteasome, MG132 (CbzLLLal) was used to define a role for the proteasome-mediated protein degradation in their metabolism. Proteasome activity was assayed in cultures of T. versicolor and P. radiata following a nutritional shift from primary growth (i.e. trophophase) to idiophase triggered by nitrogen or carbon starvation. In carbon-starved cultures. addition of MG132 decreased intracellular and extracellular laccase and peroxidase activities whereas in nitrogen-starved cultures, addition of this proteasome inhibitor increased intracellular activities of these enzymes by 1.5 to 2 fold and extracellular activities by 4 to 7 fold in T. versicolor. Similar but less dramatic changes were observed with P. radiata. The results indicate that proteasomes play a role in the metabolism of these organisms.