The process parameters influencing the production of extracellular laccases by Streptomyces psammoticus MTCC 7334 were optimized in submerged fermentation. Coffee pulp and yeast extract were the best substrate and nitrogen source respectively for laccase production by this strain. The optimization studies revealed that the laccase yield was maximum at pH 7.5 and temperature 32 degrees C. Salinity of the medium was also observed to be influencing the enzyme production. An agitation rate of 175 rpm and 15% inoculum were the other optimized conditions for maximum laccase yield (5.9 U/mL). Pyrogallol and para-anisidine proved to be the best inducers for laccase production by this strain and the enzyme yield was enhanced by 50% with these inducers. S. psammoticus was able to decolourize various industrial dyes at different rates and 80% decolourization of Remazol Brilliant Blue R (RBBR) was observed after 10 days of incubation in dye based medium. (C) 2007 Elsevier Ltd. All rights reserved.