A novel manganese peroxidase (MnP) isolated from solid state culture of Trametes versicolor IBL-04 was immobilized using xerogel matrix composed of trimethoxysilane (TMOS) and propyltetramethoxysilane (PTMS). FTIR spectroscopy confirmed the successful entrapment of MnP into the xerogel matrix. An immobilization efficiency of 92.2% was achieved with a purified active fraction containing 2 mg/mL MnP. After 24 h incubation at varying pH and temperatures, the immobilized MnP retained 82 and 75% activity at pH 4 and 80°C, respectively. Xerogel matrix immobilization enhanced the catalytic efficiency of entrapped MnP. Metal ions including Cu2+, Mn2+ and Fe2+ stimulated enzyme activity while cysteine, EDTA and Ag+ inhibited the activity. MnP preserved 82% of its initial activity during oxidation of MnSO4 in 10 consecutive cycles, demonstrating the reusability of xerogel entrapped MnP. The immobilized MnP could be stored for up to 75 days at 4°C without significant activity loss. To explore the industrial applicability of MnP, the immobilized MnP was tested for decolorization of textile industry effluent in a Packed Bed Reactor System (PBRS). After five consecutive cycles, 98.8% decolorization of effluent was achieved within 5 h. The kinetic properties, storage stability and reusability of entrapped MnP from T. versicolor IBL-04 reflect its prospects as biocatalyst for bioremediation and other industrial applications.