Lignin peroxidase is generally considered to be a primary catalyst for oxidative depolymerization of fignin by white-rot fungi. However, some white-rot fungi lack lignin peroxidase. Instead, many produce laccase, even though the redox potentials of known laccases are too low to directly oxidize the non-phenolic components of lignin. Pycnoporus cinnabarinus is one example of a laccase-producing fungus that degrades lignin very efficiently. To overcome the redox potential barrier, P.cinnabarinus produces a metabolite, 3-hydroxyanthranilate that can mediate the oxidation of nowphenolic substrates by laccase. This is the first description of how laccase might function in a biological system for the complete depolymerization of lignin.