Fermentation of wood hydrolysates to desirable products, such as fuel ethanol, is made difficult by the presence of inhibitory compounds in the hydrolysates. Here we present a novel method to increase the fermentability of lignocellulosic hydrolysates : enzymatic detoxification. Besides the detoxification effect, treatment with purified enzymes provides a new way to identify inhibitors by assaying the effect of enzymatic attack on specific compounds in the hydrolysate. Laccase, a phenol oxidase, and lignin peroxidase purified from the ligninolytic basidiomycete fungus Trametes versicolor were studied using a lignocellulosic hydrolysate from willow pretreated with steam and SO2. Saccharomyces cerevisiae was employed for ethanolic fermentation of the hydrolysates. The results show more rapid consumption of glucose and increased ethanol productivity for samples treated with laccase. Treatment of the hydrolysate with lignin peroxidase also resulted in improved fermentability. Analyses by GC-MS indicated that the mechanism of laccase detoxification involves removal of monoaromatic phenolic compounds present in the hydrolysate. The results support the suggestion that phenolic compounds are important inhibitors of the fermentation process.