After use of molasses as a rawmaterial for fermentation such as in alcohol and amino acid production, a large amount of colored substances remain in the fermentation as effluent after recovery of the product. Molasses waste water is one of the most difficult waste products to dispose off because of low p H and dark brown color. Laboratory experiments were conducted to decolorize molasses effluent using the fungal strain isolated fromthe effluent. The physicochemical characteristics ofmolasses effluent were evaluated. The optimum pH and temperature for the decolorization activity of the isolated fungal strain was found to be 6.0 and 300C respectively.About 30%color removal was achieved on the second day in all effluent concentrations (0.5-5%) studied, without any carbon and nitrogen source. However, maximum decolorization of 60% with added glucose (carbon source) and maximum reduction in COD of 50% was obtained on the sixth day. In all the studies, itwas found that decolorization increased upto 6 days and then decreased. This was due to the adsorption and desorption of pigments to the fungal mycelial pellets. Further characterization studies for the identification of the fungus revealed it to be Aspergillus. It was concluded that this fungal culture might have high potential application in reducing the pollution ofmolasses effluent prior to its disposal.