Low substrate solubility and slow decomposition/biotransformation [GRAPHIC] rate are among the main impediments for industrial scale lignin biotreatment. The outcome and dynamics of kraft lignin biomodification by basidiomycetous fungi, Coriolus versicolor, were investigated in the presence of dimethyl sulfoxide (DMSO). The addition of 2 vol % DMSO to aqueous media increased the lignin solubility up to 70%, while the quasi-immobilized fungi (pregrown on agar containing kenaf biomass) maintained their ability to produce lignolytic enzymes. Basidiomycetous fungi were able to grow on solid media containing both 5-25 g/L lignin and up to 5 vol % DMSO, in contrast to no growth in liquid media as a free suspended culture. When a fungal culture pregrown on agar was used for lignin treatment in an aqueous medium containing 2-5% DMSO with up to 25 g/L lignin, significant lignin modification was obsetved in 1-6 days. The analysis suggests that lignin was biotransformed, rather than biodegraded, into :an oxygenated and cross-linked phenolic polymer. The resulting product showed the removal of phenolic: monomers and/or their immediate precursors based on gas chromatography and thermal desorption pyrolysis gas, chromatography-mass spectrometry analyses. Significant intramolecular cross-linking among the, reaction products was shown by thermal carbon analysis, and H-1 NMR spectroscopy. An increase: in polarity, presumably due to oxygenation, and a decrease in polydispersity of the lignin treatment product compared to untreated lignin were observed while using liquid chromatography.