Nine Streptomyces strains were screened for their ability to solubilise and mineralise C-14-labelled lignin during growth in solid-state fermentation. Streptomyces viridosporus was confirmed as an active lignin-degrading organism along with a new isolate, Streptomyces sp. UAH 15, further classified as Streptomyces cyaneus CECT 3335. This organism was able to solubilise and mineralise the [C-14]lignin fraction of lignocellulose (44.96 +/- 1.77% and 3.41 +/- 0.48% respectively) after 21 days of incubation. Cell-free filtrates from Streptomyces sp. grown in solid-state fermentation were capable of solubilising up to 20% of the [C-14]lignin after 2 days incubation, with most of the product detected in the acid-soluble rather than in the water-soluble fraction. Identification of the extracellular enzymes produced during growth of S. cyaneus CECT 3335 revealed that extracellular peroxidase and phenol oxidase activities were present, with the activity of phenol oxidase being 100 times greater than peroxidase activity. The activity of these two enzymes was found to correlate with both solubilisation and mineralisation rates. This is the first report of phenol oxidase activity produced by a Streptomyces strain during growth in solid-state fermentation. A role for the enzyme in the solubilisation and mineralisation of lignocellulose by S. cyaneus is suggested.