Laccase, an oxidoreductive enzyme, is important in bioremediation. Although marine fungi are potential sources of enzymes for industrial applications, they have been inadequately explored. The fungus MTCC 5159, isolated from decaying mangrove wood and identified as Cerrena unicolor based on the D1/D2 region of 28S and the 18S ribosomal DNA sequence, decolorized several synthetic dyes. Partially purified laccase reduced lignin content from sugarcane bagasse pulp by 36% within 24 h at 30 degrees C. Laccase was the major lignin-degrading enzyme (approximately 24,000 U L(-1)) produced when grown in low-nitrogen medium with half-strength seawater. Three laccases, Lac I, Lac II, and Lac III, of differing molecular masses were produced. Each of these, further resolved into four isozymes by anion exchange chromatography. The N-terminal amino acid sequence of the major isozyme, Lac IId showed 70-85% homology to laccases from basidiomycetes. It contained an N-linked glycan content of 17%. The optimum pH and temperature for Lac IId were 3 and 70 degrees C, respectively, the half-life at 70 degrees C being 90 min. The enzyme was most stable at pH 9 and retained >60% of its activity up to 180 min at 50 degrees C and 60 degrees C. The enzyme was not inhibited by Pb, Fe, Ni, Li, Co, and Cd at 1 mmol. This is the first report on the characterization of thermostable metal-tolerant laccase from a marine-derived fungus with a potential for industrial application.