The potential use of fungal pellets for decolorization of the textile dyeing wastewater was evaluated. The live pellets of the fungus Phanerochaete chrysosporium were found to remove more than 95% of the color of this wastewater within 1 d. The dye-removal capacity was a function of time and was proportional to the agitation rate; the optimum temperature was 30 degrees C. Both live and dead pellets were further examined in a repeated-batch mode for 5 d. The decolorization performance of live pellets remained high and stable for 5 d and they showed twice to thrice higher decolorization capacity than dead pellets.