White-rot fungi (WRF) and their lignin modifying enzymes (LME) can degrade a wide range of trace organic contaminants (TrOC), which are suspected to cause adverse health effects in humans and other biota. Recent studies have successfully applied either whole-cell WRF or their extracellular culture extract to remove TrOC from the aqueous phase. TrOC removal by a WRF system is dependent on a range of factors including molecular structure of the TrOC, fungal species and their specific LME, culture medium composition, and methods to enhance fungal degradation capacity; however, the specific relationships between these factors have not been systematically delineated. The aim of this review paper is to fill this important gap in the literature by critically analysing the ability of WRF and their LME specifically to remove TrOC. Mechanisms and factors governing the degradation of TrOC by WRF and their LME are reviewed and discussed. © 2013 Elsevier Ltd.