A group of fungal strains were isolated from a polyphenol polluted soil, taken from an olive oil processing plant in Attica, Greece. The fungi were tested for their ability to decolorize a polyaromatic dye Poly R-478, which was used as a model compound to test their ligninolytic activities. The strain K1.1 decolorized efficiently the dye on agar plates and was further studied. PCR amplification of the internal transcribed spacer (ITS) region of the ribosomal RNA genes from the genomic DNA isolated from mycelium grown in liquid culture resulted in amplified fragments. Via BLASTN search, the length of a 773 base pairs was identified as the basidiomycetes Coprinellus xanthothrix. The growth rates and the tolerance of the fungus were compared on solid media, containing four different concentrations of pentachlorophenol. Extracellular enzyme activities (lignin peroxidase, manganese peroxidase and laccase) were determined in defined liquid medium. The isolate expressed laccase and manganese peroxidase but not lignin peroxidase. The removal of the dye was also estimated in liquid medium. The fungus showed biosorption and biotransformation as removal mechanisms.