Bioremediation is considered a promising eco-efficient alternative for industrial wastewater treatment. Particular attention is currently being given to biological degradation of synthetic dyes and more specifically to colour removal by fungi. This work looks at the extracellular enzymatic system of strain Euc-1. Its ability to decolourize 14 xenobiotic azo dyes was evaluated and compared with the well-known species Phanerochaete chrysosporium. Strain Euc-1 is a mesophilic white-rot basidiomycete, the main secreted ligninolytic enzyme being laccase (0.38 U ml−1). Although low manganese-dependent peroxidase activity (0.05 U ml−1) was also detected, neither lignin peroxidase nor aryl alcohol oxidase could be found in batch culture. Optimum pH values of 4.0 and 5.0 were obtained in the laccase-catalysed oxidation of guaiacol and syringaldazine, respectively. Laccase activity increased with the temperature rise up to 50–60 °C and remarkable thermal stability was observed at 50 °C with a half-life of 12 h and no deactivation within the first 2 h. Solid-plate decolourization studies showed that basidiomycete Euc-1 decolourized 11 azo dyes whereas P. chrysosporium only two. Moreover, it is shown that purified laccase from basidiomycete Euc-1 efficiently decolourizes the azo dye acid red 88.