A new customer and environmental friendly method of hair bound dye decolouration was developed. Biotransformation of the azo-dyes Flame Orange and Ruby Red was studied using different oxidoreductases. The pathways of azo dye conversion by these enzymes were investigated and the intermediates and metabolites were identified and characterised using UV-vis spectroscopy, high-performance liquid chromatography (HPLC) and mass spectrometry (MS). Laccase from Pycnoporus cinnabarinus, manganese peroxidase (MnP) from Nematoloma frowardii and the novel Agrocybe aegerita peroxidase (AaP) were found to use a similar mechanism to convert azo dyes. They N-demethylated the dyes and concomitantly polymerized them to some extent. On the other hand the mechanism for cleavage of the azo bond by azo-reductases of Bacillus cereus and B. subtilis was based on reduction of the azo bond at the expense of NAD(P)H. (c) 2006 Elsevier Inc. All rights reserved.