Two Strepfomyces strains, UAH 30 and UAH 51, have been shown to decolourise a paper-mill effluent obtained after semichemical alkaline pulping of wheat straw. Fractionation of the effluent decolourised by strains UAH 30 and UAH 51 showed that 60% and 80% respectively of the alkali-lignin fraction have been removed from the effluent after 7 days of growth. C-13 NMR cross polarization and magic angle spinning (CPMAS) spectra of the alkali-lignin remaining in the effluent after decolourisation revealed a decrease in the relative amount of aromatic lignin units compared to that obtained from the untreated effluent along with a reduction in the ratio of syringyl:guaiacyl units. Gas chromatography/mass spectrometry analysis of the low-molecular-mass compounds extracted from the decolourised effluent revealed the presence of new aromatic lignin-related compounds that were not present in the untreated control effluent. This was linked to a general depolymerization of larger lignin molecules occurring during decolourisation by the two Streptomyces strains. Identification of low-molecular-mass aromatic compounds extracted from the decolourised effluent revealed only the presence of p-hydroxyphenyl units in effluents decolourised by the strain UAH 30 while p-hydroxyphenyl, guaiacyl and syringyl units were detected in effluents decolourised by Streptomyces strain UAH 51. The study indicates that, while decolourisation is a common feature of the two Streptomyces strains, the mechanisms involved in the degradation of the lignin fractions may be different and strain-specific.