To study the characterization and dye decolorization ability of a recombinant Pycnoporus sanguineus laccase, the enzyme was purified from the fermentation liquid of Pichia pastoris using ultrafiltration, anion-exchange chromatography and gel filtration. The results showed that the recombinant laccase had a molecular weight of around 62.8 kD. It oxidized the substrates 2,2′-azino-bis(3-ethylbenzothiazoline-6-sulfonic acid) (ABTS), syringaldazine and 2,6-dimethoxyphenol at optimum pH of 2.2, 4.2 and 4.0, with Km values of 20.73, 48.48 and 1 252.39 μmol/L, respectively. The stability of laccase activity in organic solutions was methanolethanolacetonedimethyl sulfoxide. High laccase activity was found in the presence of Cu2+ and Al3+, while Hg2+ showed a strong inhibition effect. Remazol brilliant blue R could be efficiently decolorized by the purified laccase in the absence of mediator, while the decolorization of indigo carmine and crystal violet proceeded slowly. When ABTS or violuric acid was added as redox mediators, the enzyme could rapidly decolorize indigo carmine and crystal violet. The results demonstrate the potential application of recombinant laccase in the treatment of dye effluents.