Extensive biodegradation of pentachlorophenol (PCP) by the white rot fungus Phanerochaete chrysosporium was demonstrated by the disappearance and mineralization of [14C]PCP in nutrient nitrogen-limited culture. Mass balance analyses demonstrated the formation of water-soluble metabolites of [14C]PCP during degradation. Involvement of the lignin-degrading system of this fungus was suggested by the fact the time of onset, time course, and eventual decline in the rate of PCP mineralization were similar to those observed for [14C]lignin degradation. Also, a purified ligninase was shown to be able to catalyze the initial oxidation of PCP. Although biodegradation of PCP was decreased in nutrient nitrogen-sufficient (i.e., nonligninolytic) cultures of P. chrysosporium, substantial biodegradation of PCP did occur, suggesting that in addition to the lignin-degrading system, another degradation system may also be responsible for some of the PCP degradation observed. Toxicity studies showed that PCP concentrations above 4 mg/liter (15 microM) prevented growth when fungal cultures were initiated by inoculation with spores. The lethal effects of PCP could, however, be circumvented by allowing the fungus to establish a mycelial mat before adding PCP. With this procedure, the fungus was able to grow and mineralize [14C]PCP at concentrations as high as 500 mg/liter (1.9 mM).