Nowadays the treatment of environmental pollutants such as synthetic dyes (used in multiple industries such as paper, textile, food, plastic and pharmaceutical) has received much attention, especially for biotechnological treatments using both native and artificial enzymes. In this context, many enzymes have been reported to efficiently perform dye degradation. Peroxidase is one such enzyme, which causes dye degradation either by precipitation of chemical structure of aromatic dyes or by opening up their aromatic ring structure. In the present study an extra-cellular peroxidase extracted from a bacterial strain Bacillus sp. F31 JX984444.1 was tested for its capability to decolorize 16 different dyes used in various industries. Out of 16 different textile dyes the Bacillus sp. peroxidase efficiently decolorized 5 dyes out of which 4 triphenyl methane dyes (Basic Fuchsin (BF), Rhodamine B (RB), Coomassie Brilliant Blue (CBBG) and Malachite Green (MG) showed decolorization up to 95.5%, 70.8%, 70% and 40%, respectively, while a polymeric heterocyclic dye Methylene Blue (MB) showed 66.2% decolorization. These 5 dyes were studied to further enhance their decolorization by peroxidase after purification by optimizing different reaction conditions (temperature, time, enzyme concentration, buffer pH, dye concentration and effect of various salt ions, H2O2 concentration). This study indicates that the extracellular peroxidase (purified) from Bacillus sp. can be used as a useful tool for the treatment (degradation/decolorization) of industrial effluents contaminated with harmful industrial dyes.