An efficient transformation and expression system was developed for the industrially relevant basidiomycete Pycnoporus cinnabarinus. This was used to transform a laccase-deficient monokaryotic strain with the homologous lac1 laccase gene placed under the regulation of its own promoter or that of the SC3 hydrophobin gene or the glyceraldehyde-3-phosphate dehydrogenase (GPD) gene of Schizophyllum commune. SC3-driven expression resulted in a maximal laccase activity of 107 nkat ml(-1) in liquid shaken cultures. This value was about 1.4 and 1.6 times higher in the cases of the GPD and lac1 promoters, respectively. lac1-driven expression strongly increased when 25 g of ethanol liter(-1) was added to the medium. Accordingly, laccase activity increased to 1,223 nkat ml(-1). These findings agree with the fact that ethanol induces laccase gene expression in some fungi. Remarkably, lac1 mRNA accumulation and laccase activity also strongly increased in the presence of 25 g of ethanol liter(-1) when lac1 was expressed behind the SC3 or GPD promoter. In the latter case, a maximal laccase activity of 1,393 nkat ml(-1) (i.e., 360 mg liter(-1)) was obtained. Laccase production was further increased in transformants expressing lac1 behind its own promoter or that of GPD by growth in the presence of 40 g of ethanol liter(-1). In this case, maximal activities were 3,900 and 4,660 nkat ml(-1), respectively, corresponding to 1 and 1.2 g of laccase per liter and thus representing the highest laccase activities reported for recombinant fungal strains. These results suggest that P. cinnabarinus may be a host of choice for the production of other proteins as well.