The ability of enzymatic Kraft Lignin (KL) demethylation was determined using catechol and ferric ion coordination (catechol-Fe3+ complexes) by reduction of Fe3+ to Fe2+ and formation of mono, bis- and/or tris-catechol-Fe3+ complexes has been investigated to identify enzyme that can strip-off O-methyl groups from lignin such as O-demethylase. To detect fungal demethylation and release of catechol-like structures, these were demonstrated using catechol, gallic acid and caffeic acid as standard model compounds to forms mono, bis- and/or tris-catechol-Fe3+ complexes. The catechol-Fe3+ complexes formation controlled by pH via the deprotonation of the catechol hydroxyls was investigated at pH 2.5, 8.0 and 10.0 and demonstrated that catechol formed mono, bis- and/or tris-catechol-Fe3+ complexes, and showed maximum absorbance at 547 nm. Lignin demethylation (O-demethylase) and formation of pyrocatecholic structures was detected using Aspergillus sp. and Galerina autumnalis culture filtrates as the enzyme source. The produced aromatic vicinal diol groups in lignin model compounds (LMCs) and KL were determined using different catecholic-binding reagents with the influence of H2O2, along with 4-antiaminopyrine reagent, was analyzed by the following: i) Fe3+-catechol complexation method, ii) HNO2 method, iii) FAS (Ferric Ammonium-Sulfate) method, iv) Ti(III)-NTA (Titanium (III)- Nitrilotriacetate) method for hydrolytic zone formation. Among the tested methods showing lytic zone formation was Fe3+-catechol complexation. The LMCs and KL treated using Aspergillus sp. culture filtrate showed maximum Fe3+-catechol complexes with 3-methoxy catechol (91 μmol/mL), o-vanillin (44 μmol/mL) and KL (100 μmol/mL). In addition, Galerina autumnalis culture filtrate showed demethylation of vanillin (48 μmol/mL), 3-methoxy catechol (82 μmol/mL), o-vanillin, (33 μmol/mL), 3 4-dimethoxybenzyl alcohol (49 μmol/mL) and KL (41 μmol/mL). The results suggest that lignin demethylation (O-demethylases) activity that strip-off methyl groups in LMCs and KL and produced vicinal diols that covalently bind with Fe3+ to form Fe3+-catechol complexes. The new Fe3+-catechol complexation method has the ability to characterize pyrocatechol and galloyl structures in chemically or biologically modified lignins and to detect O-demethylase activity.