Laccase is one of the extracellular ligninolytic enzymes highly produced by white rot fungi (WRF) and widely used in industrial processes such as decolorizing of synthetic dyes. In this study, the enzyme was produced by a new isolated WRF (Trametes hirsuta LBF-AA017) through two types of fermentation: submerged and solid state fermentation. In the submerged culture, several local lignocellulosic materials (0.5% w/v): bagasse, palm kernel cake (PKC), sugar palm fruit cake (SPFC), corn cobs (CC), tobacco road (TR), were used as laccase inducers. Among 5 materials tested, treatment using SPFC resulted highest laccase production, 645 U L−1 in the 9th day. Higher concentration of SPFC (5% w/v) enhanced laccase poduction by the fungus up to 2034.354 U L−1 in 9 days. Addition of SPFC above 25% (w/v) into culture medium made solid state condition and significantly enhance the production of laccase by the fungus. The crude laccase could effectively decolorize three types of chemical dyes: congo red (CR), brilliant blue G (BBG), coomassie brilliant blue (CBB), in a short period. The laccase could effectively remove three kind of tested dyes with various rates: 45, 91, 48%, respectively for CR, BBG and CBB in one hour reaction. Rapid removal of dyes, especially for BBG, by the laccase T. hirsuta LBF-AA017 has initially proven the potential to be applied for environmental biotechnology.