An extracellular laccase was isolated and purified from Pleurotus sajor-caju grown in submerged culture in a bioreactor, and used to investigate its ability to decolorize three azo dyes. The extracellular laccase production was enhanced up to 2.5-fold in the medium amended with xylidine (1 mM). Purification was carried out using ammonium sulfate (70% w/v), DEAE-cellulose, and Sephadex G-100 column chromatography. The enzyme was purified up to 10.3-fold from the initial protein preparation with an overall yield of 53%. The purified laccase was monomeric with an apparent molecular mass of 61.0 kDa. The purified enzyme exerted its optimal activity with 2,2-azino-bis(3-ethylbenzo-thiazoline-6-sulfonate (ABTS) and oxidized various lignin-related phenols. The catalytic efficiencies k(cat)/K-m determined for ABTS and syringaldazine were 9.2x10(5) and 8.7x10(5), respectively. The optimum pH and temperature for the purified enzyme was 5.0 and 40 degrees C, respectively. Sodium azide completely inhibited the laccase activity. The absorption spectrum revealed type 1 and type 3 copper signals. The purified enzyme decolorized azo dyes such as acid red 18, acid Black 1, and direct blue 71 up to 90, 87, and 72%, respectively. Decolorization ability of P. sajor-caju laccase suggests that this enzyme could be used for decolorization of industrial effluents.