Production of laccase activity by the hyphomycete Chalara (syn. Thielaviopsis) paradoxa CH32 reached highest levels at the idiophase, but was not enhanced by putative laccase inducers. Laccase activity from the extracellular fluid was purified and characterised, consisting of a single protein of 67 kDa, sensitive to heat and to acidic pH. Laccase activity showed an optimum pH of 6.5 for most of the substrates, while some substrates were oxidised only at pH 4.5. The optimum temperature for enzyme activity was 30 degreesC. Laccase activity was inhibited by metal cations, especially by Hg2+. It was also inhibited by reducing agents, EDTA, potassium cyanide and sodium azide. The enzyme retained a high percentage of activity in the presence of some organic solvents (methanol, ethanol and iso-propyl alcohol). The substrate specificity of the purified laccase was greatly influenced by the nature and the position of the substituting groups in the phenolic ring.