A new physiological role for veratryl alcohol in fungi important in the biodegradation of the lignified plant cell wall is presented. Botryosphaeria sp., grown on starch, pectin, cellulose or xylan produced amylase, pectinase, cellulase, xylanase and laccase, whereas glucose and xylose repressed the synthesis of cellulase and xylanase, but not laccase. When cultured on each of these substrates in the presence of veratryl alcohol, laccase activity increased but the activities of amylase, pectinase, cellulase and xylanase significantly decreased. Basal medium containing softwood kraft lignin in the presence of veratryl alcohol induced laccases above constitutive levels. Ethyl alcohol also stimulated laccase production.