Versatile peroxidase (VP) is defined by its capabilities to oxidize the typical substrates of other basidiomycete peroxidases: (i) Mn²⁺, the manganese peroxidase (MnP) substrate (Mn³⁺ being able to oxidize phenols and initiate lipid peroxidation reactions); (ii) veratryl alcohol (VA), the typical lignin peroxidase (LiP) substrate; and (iii) simple phenols, which are the substrates of Coprinopsis cinerea peroxidase (CIP). Crystallographic, spectroscopic, directed mutagenesis, and kinetic studies showed that these 'hybrid' properties are due to the coexistence in a single protein of different catalytic sites reminiscent of those present in the other basidiomycete peroxidase families. Crystal structures of wild and recombinant VP, and kinetics of mutated variants, revealed certain differences in its Mn-oxidation site compared with MnP. These result in efficient Mn²⁺ oxidation in the presence of only two of the three acidic residues forming its binding site. On the other hand, a solvent-exposed tryptophan is the catalytically-active residue in VA oxidation, initiating an electron transfer pathway to haem (two other putative pathways were discarded by mutagenesis). Formation of a tryptophanyl radical after VP activation by peroxide was detected using electron paramagnetic resonance. This was the first time that a protein radical was directly demonstrated in a ligninolytic peroxidase. In contrast with LiP, the VP catalytic tryptophan is not β-hydroxylated under hydrogen peroxide excess. It was also shown that the tryptophan environment affected catalysis, its modification introducing some LiP properties in VP. Moreover, some phenols and dyes are oxidized by VP at the edge of the main haem access channel, as found in CIP. Finally, the biotechnological interest of VP is discussed.