Abstract: The present study deals with the distribution of fungal species in Cuddalore dye industrial waste (Lat 11°42`N; Long 79°46`E) and their dye degrading activity. Totally 13 species under 17 genera were isolated and screened for their decolorization activity against methylene blue, gentian violet, crystal violet, cotton blue, Sudan black, malachite green, methyl red and corbol fushion in mineral salt medium and Czepex-Dox broth. In agar medium, decolorization began with the formation of zone of clearance around the colonies. Aspergillus ochraceus, A. terreus, A. niger, Penicillium citrinum and Fusarium moniliforme decolorized maximum number of dyes to a great extent. Mucor racemosus, Cladosporium cladosporioides, Penicillium oxalicum and Trichoderma viride did not decolorize any of the dyes tested. In liquid medium, decolorizing activity was measured spectrophotometrically. Aspergillus ochraceus, A. terreus, A. niger, Penicillium citrinum and Fusarium moniliforme registered maximum color reduction, where as Mucor racemosus, Cladosporium cladosporioides, Penicillium oxalicum and Trichoderma viride expressed very low amount of color reduction. Biomass and the extent of dye removal are directly propositional. Among the 13 species of fungal isolates, Aspergillus ochraceus, A. terreus, A. niger, Fusarium moniliforme and Penicillium citrinum seems to be potential candidates for dye degradation. These strains can be used for the bioremediation of environs polluted with dye effluents.