Among 23 isolates of cutinase-producing fungi from Thailand, one strain of Fusarium falciforme PBURU-T5 exhibited the greatest cutinase activity (3.36 ± 0.12Uml-1) against p-nitrophenyl butyrate. This strain was found to produce an inducible cutinase when cultivated in the liquid mineral medium containing cutin from papaya peel as the sole carbon source. By optimizing the production condition based on the central composite experimental design, the maximal cutinase activity up to 4.82 ± 0.18Uml-1 was attained under the condition: 0.4% (w/v) papaya cutin as the carbon source, 0.3% (w/v) peptone as the nitrogen source, incubation temperature at 30°C for 4days, and initial pH 7.0. The crude enzyme was optimally active at 35°C and pH 9.0 which was suitable for textile industrial application. The treatment with the crude PBURU-T5 cutinase (100Ug-1 dry weight of fabric) could enhance the wetting time, water adsorption and moisture regain of polyethylene terephthalate fabric up to 1.9-, 1.2- and 1.3-fold, respectively, comparing with the conventional 1M NaOH treatment. The increment of these fabric properties by enzymatic treatment could facilitate the dyeing process and enhance the fabric softness. Thus, F. falciforme PBURU-T5 is the promising source of cutinase for the modification of the PET fabric surface.