Azodyes are important chemical pollutants of industrial origin. The decolourisation and degradation efficiency of Aspergillus niger and Phanerochaete chrysosporium RP-78 with the reactive azodyes- Procion Brilliant Red H-E7B (Reactive Red 141), Procion Yellow H-E4 (Reactive yellow 84), Procion Navy Blue H-ER (Reactive blue 171) was studied. Among the three azodyes, Procion navy blue is the rapidly degrading one followed by Procion brilliant red and Procion yellow. The present studies also indicate that P. chrysosporium RP-78 is the best bio-remediative organism than A. niger. Though A. niger shows less ability than P. chrysosporium RP-78, it has showed appreciable ability of degradation. It was observed that the inducer (Veratryl alcohol) and inhibitor (Thiourea) of lignin degradation significantly affected the dye degradation.