Release of toxic and recalcitrant chemicals including synthetic dyes from industries profoundly affects soil fertility and aquatic life. Use of physical and chemical methods for removal of dyes creates disposable problem of remaining dye sludge, whereas biotechnological approach provides viable, less sludge and eco-friendly method. In the present study, a fungus Aspergillus sp. isolated from the soil was employed for decolorization and degradation of five dyes. At first the biodegradation of these dyes was first studied in potato dextrose broth and maximum decolorization of 80.86, 40.05, 92.44, 38.12 and 95 % of decolorization was observed for Methylene blue, Bromophenol blue, Congo red, Malachite green and Rose Bengal respectively. As the maximum decolorization was observed with Congo red and Rose Bengal, the effect of different parameters like carbon source, nitrogen source, pH and temperature was also studied in these dyes. Maximum decolorization of (91 and 52 %) was achieved when supplemented with carbon source, (87 and 46 %) with nitrogen source, (86 and 51 %) at pH at 4–5, (90 and 41 %) at 25–30 °C for Congo red and rose Bengal respectively. The degradation of dyes was observed by the change in original color and visual disappearance of color from the fungus-treated cultures. Degradation/decolorization of dyes was also observed as accumulation of dyes by the fungal mycelium, and it was confirmed by the presence of colored fungal mycelium in fungus-treated cultures. Biosorption studies were also done by using different concentrations of dyes and dead and inactive mycelial mat of Aspergillus sp. This indicated that binding of the dye to dead mycelial mat occurred rapidly with more than 50 % within 1 day and the dye absorbed to the mat increased with increase in the dye concentration, a maximum of 93 and 90 % decolorization was attained at 5 mg Congo red and rose Bengal concentrations with same mycelia mat and maximum of 92 and 88 % decolorization was attained at 750 mg of dead mycelial mat concentration with same dye concentration. Thus the decolorization achieved by metabolically inactive mycelium was equal to that attained by the live mycelium and Aspergillus sp. showed maximum decolorization with Congo red and Rose Bengal dyes. Further this can be commercially used to treat industrial effluents.