Degradation experiment of model polychlorinated biphenyl (PCB) compound 4,4'-dichlorobiphenyl (4,4'-DCB) and its metabolites by the white-rot fungus Phanerochaete chrysosporium and newly isolated 4,4'-DCB-degrading white-rot fungus strain MZ142 was carried out. Although P. chrysosporium showed higher degradation of 4,4'-DCB in low-nitrogen (LN) medium than that in potato dextrose broth (PDB) medium, Phanerochaete sp. MZ142 showed higher degradation of 4,4'-DCB under PDB medium condition than that in LN medium. The metabolic pathway of 4,4'-DCB was elucidated by the identification of metabolites upon addition of 4,4'-DCB and its metabolic intermediates. 4,4'-DCB was initially metabolized to 2-hydroxy-4,4'-DCB and 3-hydroxy-4,4'-DCB by Phanerochaete sp. MZ142. On the other hand, P. chrysosporium transformed 4,4'-DCB to 3-hydroxy-4,4'-DCB and 4-hydroxy-3,4'-DCB produced via a National Institutes of Health shift of 4-chlorine. 3-Hydroxy-4,4'-DCB was transformed to 3-methoxy-4,4'-DCB; 4-chlorobenzoic acid; 4-chlorobenzaldehyde; and 4-chlorobenzyl alcohol in the culture with Phanerochaete sp. MZ142 or P. chrysosporium. LN medium condition was needed to form 4-chlorobenzoic acid, 4-chlorobenzaldehyde, and 4-chlorobenzyl alcohol from 3-hydroxy-4,4'-DCB, indicating the involvement of secondary metabolism. 2-Hydroxy-4,4'-DCB was not methylated. In this paper, we proved for the first time by characterization of intermediate that hydroxylation of PCB was a key step in the PCB degradation process by white-rot fungi.