Catalytic oxidation of biphenyl derivatives was investigated using laccase in a homogeneous aqueous-organic system. A thermostable laccase from Trametes sp. showed the highest catalytic activity for the oxidation of 4-hydroxybiphenyl (4-HB) at a reaction temperature of 60degreesC when dimethylsulfoxide (DMSO) was employed as a co-solvent. Furthermore, the catalytic performance was successfully enhanced by the incorporation of a laccase mediator system (LMS) into the aqueous-DMSO media. The catalytic performance strongly depended on the type of mediator, and the highest activity was observed with 2,2'-azino-bis-(3-ethylbenzothiazoline-6-sulfonic acid) (ABTS) as mediator, suggesting the importance of the selection of a suitable mediator. It was verified that this mediator system is applicable to the oxidation of several biphenyl derivatives with hydroxylgroups.