BACKGROUND: For most dioxin-contaminated sawmill soils, combustion is recommended. However, the process may be inefficient if the soil has a high organic matter content. The use of saprotrophic basidiomycetous fungi is an alternative for pretreatment of this kind of soil. A total of 147 fungi were evaluated for their ability to grow in sawmill soil. From this screening, the best soil colonizing fungi were selected to study their enzyme activities and degradation of soil organic matter. Pine (Pinus sylvestris) bark was used as a co-substrate to propagate the fungi into the soil. The activities of manganese peroxidase (MnP), laccase, endo-1,4-beta-glucanase, endo-1,4-beta-xylanase, and endo-1,4-beta-mannanase were analysed from the inocula and fungal treated soil. RESULTS: The screening revealed that 56 out of 147 fungi were able to grow in non-sterile soil, and most of them were litter-decomposing fungi (LDF). In pine bark cultures, the highest enzyme activities were observed with Phanerochaete velutina, which produced 5 U g(-1) of MnP. The activity of endo-1,4-beta-glucanase was generally higher than that of other hydrolytic enzymes. The highest carbon loss from soil with a high organic matter content was achieved by P. velutina (3.4%) and Stropharia rugosoannulata (2.4%). CONCLUSIONS: Many LDF, and in addition the white-rot fungus P. velutina, are potential degraders of soil organic matter since they showed good growth and respiratory activity. Pine bark was a suitable lignocellulosic co-substrate and a good promoter of MnP activity. (C) 2009 Society of Chemical Industry