Dimethyl sulfoxide (DMSO) is commonly used as a co-solvent to dissolve poorly water-soluble biologically active agents to assess their biological activities such as for enzyme induction. The question addressed was whether DMSO can be assumed to be an inert co-solvent. The influence of DMSO on the production of extracellular enzymes by Pleurotus ostreatus was investigated. DMSO functioned as either an inducer or a repressor, depending on the enzyme studied. The production of laccase and endo-1,4-beta-xylanase increased by 29 and 250%, respectively, in presence of DMSO. However, DMSO repressed the activities of manganese peroxidase, beta-glucosidase, beta-xylanase, and endo-1,4-beta-glucanase by 30, 33, 99 and 16%, respectively. These results raise concerns about the interpretation of bioactivity measurements when DMSO is assumed to function as an inert co-solvent to solubilize water-insoluble molecules.