As part of an effort to determine all the gene products involved in wood degradation, we have performed massively parallel pyrosequencing on an expression library from the white rot fungus Phanerochaete chrysosporium grown in shallow stationary cultures with red oak as the carbon source. Approximately 48,000 high quality sequence tags (246 bp average length) were generated. 53% of the sequence tags aligned to 4,262 P. chrysosporium gene models, and an additional 18.5% of the tags reliably aligned to the P. chrysosporium genome providing evidence for 961 putative novel fragmented gene models. Due to their role in lignocellulose degradation, the secreted proteins were focused upon. Our results show that the four enzymes required for cellulose degradation: endocellulase, exocellulase CBHI, exocellulase CBHII, and beta-glucosidase are all produced. For hemicellulose degradation, not all known enzymes were produced, but endoxylanases, acetyl xylan esterases and mannosidases were detected. For lignin degradation, the role of peroxidases has been questioned; however, our results show that lignin peroxidase is highly expressed along with the H(2)O(2) generating enzyme, alcohol oxidase. The transcriptome snapshot reveals that H(2)O(2) generation and utilization are central in wood degradation. Our results also reveal new transcripts that encode extracellular proteins with no known function.