Although almost every U.S. pulp mill has a biological wastewater treatment system, these systems based on bacteria, are largely ineffective in the removal of color. For this reason, we have attempted to utilize Phanerochaete chrysosporium, a fungus known to degrade lignin, as the primary organism in a novel waste treatment scheme named the MyCoR Process. Color from bleached Kraft mills originates principally from the first extraction stage of the bleach plant. It is this waste stream which is sent to the MyCoR Process reactor, a rotating biological contactor, for decolorization. We have found that under optimal conditions up to 2,000 color units/L/day can be removed from the waste stream. There is also a concomitant removal of COD and BOD. In addition, chlorolignins originating from the bleaching process were found to be dechlorinated; this is of interest to those concerned with the impact of bleach plant effluents on the environment. The process uses conventional wastewater treatment equipment. However, the use of a pure culture of fungus in a secondary metabolic state has not been attempted previously in a waste treatment scheme. Minor equipment modification and close operator attention may therefore be required. A preliminary economic analysis shows that the MyCoR Process, in its present state, would cost about US$30/metric ton of bleached Kraft pulp produced. This cost will decrease as improved or new strains of fungi are developed for the process.