•Oudemansiella canarii laccase was produced in solid-state fermentation.•A single 41 KDa-laccase was produced in this condition.•Laccase was used in the degradation of Congo red.•Several Congo red degradation products were identified by mass spectrometry.•Laccase treatment reduced the toxicity of Congo red. A single laccase with molecular weight of 41 kDa was produced by the white-rot fungus Oudemansiella canarii cultured on solid state fermentation using a mixture of sugarcane bagasse-wheat bran as substrate. The enzyme (5 U) was able to decolourize 80% of 50 mg/L Congo red within 24 h at 30 °C and pH 5.5. The relationship between the decolorization rate and dye concentration obeyed Michaelis–Menten kinetics, with KM and Vmax values of 46.180 ± 6.245 µM and 1.840 ± 0.101 µmol/min, respectively. Fourier transform infrared spectroscopy (FTIR) and mass spectrometry allowed to conclude that the laccase acts not only on the dye chromophore group, but also that it cleaves different covalent bonds, causing an effective fragmentation of the molecule. The action of the laccase caused a significant reduction in toxicity, as indicated by the Microtox test. In conclusion, O. canarii laccase could be useful in future biological strategies aiming at degrading azo dyes.