We investigated the decolorization of an azo-reactive dye, Reactive Red 120, by a white-rot basidiomycete, Phanerochaete sordida strain YK-624. In liquid culture of P. sordida in a medium containing 3% malt extract and 200 mg/l of the dye, the dye was 90.6% decolorized after 7 d. Manganese peroxidase (MnP) activity was detected during the decolorization process. The dye could be decolorized by purified MnP of P. sordida in the presence of Mn(II) and Tween 80. The involvement of lipid peroxidation during decolorization with MnP was considered. With shaking, the dye could be decolorized without the addition of hydrogen peroxide. The decolorization did not occur under anaerobic conditions, suggesting that dye decolorization by MnP is influenced by dissolved oxygen. Since catalase did not inhibit the decolorization with MnP, we inferred that the MnP catalytic cycle would be promoted by hydroperoxides formed from the decomposition of malonate or from lipid peroxidation.