Background Lignin is a complex polymer of phenyl propanoid units found in the vascular tissues of the plants as one of lignocellulose materials. Many bacteria secrete enzymes to lyse lignin, which can be essential to ease the production of bioethanol. Current research focused on the study of ligninolytic bacteria capable of producing lignin peroxidase (LiP) which can help in lignin biodegradation and bioethanol production. Ligninolytic bacterial strains were isolated and screened from the soil samples of Simlipal Biosphere Reserve (SBR), Odisha (India), for the determination of their LiP activity. Enzymatic assay and optimization for the LiP activity were performed with the most potent bacterial strain. The strain was identified by morphological, biochemical, and molecular methods. Results In this study, a total of 16 bacteria (Simlipal ligninolytic bacteria [SLB] 1–16) were isolated from forest soils of SBR using minimal salt medium containing lignin. Out of the 16 isolates, 9 isolates showed decolourization of methylene blue dye on LB agar plates. The bacterial isolates such as SLB8, SLB9, and SLB10 were able to decolourize lignin with 15.51%, 16.80%, and 33.02%, respectively. Further enzyme assay was performed using H2O2 as substrate and methylene blue as an indicator for these three bacterial strains in lignin containing minimal salt medium where the isolate SLB10 showed the highest LiP activity (31.711 U/mg). The most potent strain, SLB10, was optimized for enhanced LiP enzyme activity using response surface methodology. In the optimized condition of pH 10.5, temperature 30 °C, H2O2 concentration 0.115 mM, and time 42 h, SLB10 showed a maximum LiP activity of 55.947 U/mg with an increase of 1.76 times from un-optimized condition. Further chemical optimization was performed, and maximum LiP activity as well as significant dye-decolourization efficiency of SLB10 has been found in bacterial growth medium supplemented individually with cellulose, yeast extract, and MnSO4. Most notably, yeast extract and MnSO4-supplemented bacterial culture medium were shown to have even higher percentage of dye decolourization compared to normal basal medium. The bacterial strain SLB10 was identified as Bacillus mycoides according to morphological, biochemical, and molecular (16S rRNA sequencing) characterization and phylogenetic tree analysis. Conclusion Result from the present study revealed the potential of Bacillus mycoides bacterium isolated from the forest soil of SBR in producing LiP enzyme that can be evaluated further for application in lignin biodegradation and bioethanol production. Scaling up of LiP production from this potent bacterial strain could be useful in different industrial applications. Graphical Abstract

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