An efficient transformation and expression system was developed for the industrially relevant basidiomycete Pycnoporus cinnabarinus. This was used to transform a laccase-deficient monokaryotic strain with the homologous lac1 laccase gene placed under the regulation of its own promoter or that of the SC3 hydrophobin gene or the glyceraldehyde-3-phosphate dehydrogenase (GPD) gene of Schizophyllum commune. SC3-driven expression resulted in a maximal laccase activity of 107 nkat ml ؊1 in liquid shaken cultures. This value was about 1.4 and 1.6 times higher in the cases of the GPD and lac1 promoters, respectively. lac1-driven expression strongly increased when 25 g of ethanol liter؊1 was added to the medium. Accordingly, laccase activity increased to 1,223 nkat ml ؊1 . These findings agree with the fact that ethanol induces laccase gene expression in some fungi. Remarkably, lac1 mRNA accumulation and laccase activity also strongly increased in the presence of 25 g of ethanol liter ؊1 when lac1 was expressed behind the SC3 or GPD promoter. In the latter case, a maximal laccase activity of 1,393 nkat ml ؊1 (i.e., 360 mg liter ؊1 ) was obtained. Laccase production was further increased in transformants expressing lac1 behind its own promoter or that of GPD by growth in the presence of 40 g of ethanol liter؊1 . In this case, maximal activities were 3,900 and 4,660 nkat ml ؊1 , respectively, corresponding to 1 and 1.2 g of laccase per liter and thus representing the highest laccase activities reported for recombinant fungal strains. These results suggest that P. cinnabarinus may be a host of choice for the production of other proteins as well.Filamentous fungi belonging to the homobasidiomycetes offer great potential for industrial and medical applications. They secrete proteins into their culture media with activities or in amounts that are not found in other fungi. For instance, homobasidiomycetes produce various metalloenzymes, such as laccases, which are attractive candidates for a wide variety of applications. These enzymes degrade a large number of recalcitrant pollutants and are a biological and environmentally friendly alternative to the highly contaminating pulping and bleaching treatments of the paper and pulp industries (3, 4). Until now, the expression of basidiomycete metalloenzymes in ascomycete production systems such as Aspergillus ssp. and Trichoderma reesei has had limited success (6). Therefore, basidiomycetes should be developed as hosts for large-scale protein production. The white rot fungus Pycnoporus cinnabarinus is an attractive candidate in this respect. This basidiomycete was selected for its ability to efficiently degrade lignin and to transform lignin-derived compounds such as ferulic acid into vanillin (9,11,22). P. cinnabarinus has a simple ligninolytic system. Neither lignin peroxidase nor manganese peroxidase activity has been detected, but laccase is produced (9). Two laccase genes have been cloned, i.e., lcc3-1 or the allelic form lac1 (10, 23) and lcc3-2 (34). Until now, transformation ...