Forty-six pulp-bleaching fungi were screened for production of key enzymes for conversion of polychlorinated dibenzo-p-dioxins--lignin peroxidase (LiP), manganese peroxidase (MnP), and manganese-independent peroxidase (MiP)--under various conditions that would allow their utilization in the environment. Of 38 MnP-producing strains with MiP activity, 22 produced LiP. Three of the new isolates, Bjerkandera sp. strains MS191, MS325, and MS1167, were the best producers of the three different peroxidases, and had reasonable growth rates. The most promising Bjerkandera sp. strain, MS325, exhibited significant levels of LiP and MnP activities under various conditions, e.g., nutrient nitrogen-sufficient or -limited conditions, conditions with or without Mn(II), and changes in temperature (15-37 degrees C). Furthermore, the ability of this strain to degrade 1,3,6,8-tetrachlorodibenzo- p-dioxin was confirmed. The results presented here indicate that utilization of Bjerkandera sp. strain MS325 on a practical scale in the environment has several advantages over many white rot fungi, which produce extracellular peroxidases only under specific conditions such as nutrient limitation.