Several species of white-rot fungi, including Trametes versicolor, Ganoderma lucidum, and Irpex lacteus, degrade substantial levels of trichloroethylene (TCE) in pure culture. T. versicolor, which was chosen for further study since it degraded higher levels of TCE, was also able to degrade perchloroethylene (PCE) aerobically. 2,2,2-trichioroethanol and carbon dioxide were identified as the main by-products from TCE degradation, whereas trichloroacetic acid (TCA) was identified as a by-product from PCE degradation. Chloride release and TCA production was stoichiometric with PCE degradation. Our studies with 1-aminobenzotriazole, an inhibitor of cytochrome P-450, suggested that cytochrome P450 may be involved in these degradation processes. Interestingly, cytochrome P-450 and the by-products identified here from PCE and TCE degradation coincide with those reported previously in mammalian systems but not from any of the microbial systems known to date.