Laccaria fraterna and Pleurotus ostreatus grow very well both in the submerged and solid state fermentations. Laccase and cellulase production by these organisms were tested in submerged and solid state fermentation. Higher levels of laccase and cellulase activity were seen in solid state fermentation than in submerged fermentation. Enzymes such as cellulase were detected both in solid and submerged fermentation. The results clearly explain that Laccaria fraterna and Pleurotus ostreatus are potential candidates for the production of industrially important enzymes using cheap raw materials such as agro-wastes.

Enzyme production is a growing field of biotechnology. Annual world sales figures are close to billion dollars (Layman, 1990) with increasing number of patents and research articles related to this field. Most enzyme manufacturers produce enzymes using submerged fermentation (SmF) techniques with enzyme titers in the range of grams per liter (Harvey and McNeil, 1993). Filamentous fungi have a number of properties which make them important both scientifically and industrially. The industrial importance of filamentous fungi is illustrated by their applications which range from production of organic acids (e.g., citric acid) and antibiotics (e.g., penicillin) to a number of industrial enzymes (Mukherjee et al., 1998). Fungi play a key role in Solid State Fermentation (SSF) for their hyphal development and allow them to selectively colonize and penetrate the solid substrate (Pandey et al., 2000).

Laccases are oxidases that transfer electrons to dioxygen, yielding water with the concomitant oxidation of a wide range of reducing substrates, including phenolic compounds and aromatic amines (Jose Renato et al., 2004). Laccases can be used in the areas of pulp bleaching, oxidative biotransformation, monomer polymerizations, biosensing and bioremediation (Lai et al., 1997). Covalent immobilization of laccases to polystyrene employing hydrazide coupling provides recyclable biocatalysts (Simkus et al., 1996).

Laccase is an extracellular enzyme produced by the white-rot fungi which is capable of reducing the toxicity of phenolic compounds through a polymerization process (Field et al., 1993). Laccase is a polyphenol oxidase from fungi, which can use oxygen to oxidize different types of aromatic molecules and to form lignin type of aromatic polymers from phenolic compounds. Laccases are produced by white-rot fungi, which use them to degrade ligninthe aromatic polymer found in all plant materials (Sayadi and Ellouz, 1993; and Garcia et al., 2000).