In this study, the decolourization potential of the white-rot fungus Ganoderma tsugae, which is capable of producing laccase was investigated to degrade reactive black dye. Biodegradation of reactive black dye was analyzed by using spectrophotometer at an absorbance of 585 nm. Laccase, manganese peroxidase and pH were served as biodegradation indices. Fourier transform infrared (FTIR) and gas chromatography mass spectrometry (GCMS) were used to analyze degradation products. Seed germination study was carried out on maize and beans seeds with distilled water (control), degraded dye products and non-degraded dye. Microtoxicity assay was also performed on the test cultures Escherichia coli, Pseudomonas aeruginosa and Klebsiella pneumoniae using the degraded dye metabolite/non-degraded dye. The non-degraded dye components inhibited the growth of P. aeruginosa (clear zone of 6 mm) and E. coli (clear zone of 3 mm). K. pneumoniae was resistant to the toxicity of the dye components. The following metabolites were detected; 3-Benzyl hexahydropyrrolo[1,2-a]pyrazine-1,4-dione, 5-Isopropylidene-3,3-dimethyl-dihydrofuran-2-one, N-[(Z)-1-Ethylpentylidene] methanamine and 10-Undecenyl aldehyde with retention time of 23.317, 16.475, 16.850 and 23.500 min, respectively.