The lignin biodegradation process has an important role in the carbon cycle of the biosphere. The study of this natural process has developed mainly with the use of basidiomycetes in laboratory investigations. This has been a logical approach since most of the microorganisms involved in lignocellulosic degradation belong to this class of fungi. However, other microorganisms such as ascomycetes and also some bacteria, are involved in the lignin decaying process. This work focuses on lignin biodegradation by a microorganism belonging to the ascomycete class,Chrysonilia sitophila. Lignin peroxidase production and characterization, mechanisms of lignin degradation (lignin model compounds and lignin in wood matrix) and biosynthesis of veratryl alcohol are outstanding. Applications of C.sitophila for effluent treatment, wood biodegradation and single-cell protein production are also discussed.