Biological upgrading of wheat straw by the white-rot fungi Phanerochaete chrysosporium, Pleurotus eryngii, Phlebia radiata, and Ceriporiopsis subvermispora was monitored during 60-day solid-state fermentation. Analysis of straw included determination of weight loss and lignin content, color analysis, and infrared spectroscopy, whereas the studies on the water-soluble fractions were carried out by infrared spectroscopy, elementary analyses and quantification of the total phenols and reducing sugars. The most selective degradation of lignin was produced by P. eryngii and especially by IC subvermispora, the former species releasing the greatest amount of colored water-soluble products, whereas an increase in straw brightness was caused by C. subvermispora. In general, the composition of the water-soluble fraction correlated with the extent of straw transformation. The initial fermentation stage (0-15 days) was characterized by the accumulation of water-soluble products from lignin degradation and fungal metabolism, the concentration of which tended to stabilize in the second stage (16-60 days). The degree of delignification at the second stage tended to coincide with the decrease of the water-soluble nitrogen.