Phanerochaete chrysosporium decolorized several polyaromatic azo dyes in ligninolytic culture. The oxidation rates of individual dyes depended on their structures. Veratryl alcohol stimulated azo dye oxidation by pure lignin peroxidase (ligninase, LiP) in vitro. Accumulation of compound II of lignin peroxidase, an oxidized form of the enzyme, was observed after short incubations with these azo substrates. When veratryl alcohol was also present, only the native form of lignin peroxidase was observed. Azo dyes acted as inhibitors of veratryl alcohol oxidation. After an azo dye had been degraded, the oxidation rates of veratryl alcohol recovered, confirming that these two compounds competed for ligninase during the catalytic cycle. Veratryl alcohol acts as a third substrate (with H2O2 and the azo dye) in the lignin peroxidase cycle during oxidations of azo dyes.