A new low-molecular-weight peptide with phenol oxidase activity, named Pc factor, was isolated and purified from liquid culture of a white-rot basidiomycete Phanerochaete chrysosporium. Its molecular weight was about 600 Da estimated by gel-filtration. Three amino acids Glu, Gly and Val were detected in hydrolysate. Absorption peaks corresponding to amino acids and peptide were observed by UV and IR spectra analysis. And the signal of Cα of amino acid was also detected by 13C-NMR method. Pc factor had high thermostability and remained active in weakly alkalescent pH range. It could chelate Fe3+ and reduce it to Fe2+, but no hydroxyl radical HO` could be detected during the reaction process. It could oxidize phenolic lignin-model compounds such as 2,6-dimethoxyphenol (2,6-DMP), 2,2(-azinobis (3-ethylbenzathiazoline-6-sulfinic acid) (ABTS) and syringaldazine in the absence of Mn2+ and H2O2. These characteristics differed greatly from those of manganese peroxidases. The oxidative catalysis of Pc factor can be enhanced by certain metal ions such as Cu2+ and Mn2+ etc., and O2 molecule was necessary for this reaction. In summary, Pc factor may function as an electron carrier in this novel oxidation-reduction system.