A novel source of α-amylase has been identified in Pycnoporus sanguineus. Spores incubated in the submerged system using wheat bran as a carbon source showed α-amylase activity. Induction of α-amylase was also observed from mycelium incubated in submerged fermentation (LM4) using starch or wheat bran as the carbon source. The effect of the inhibitors on the production of enzyme by mycelium incubated in the presence of glucose, suggested the existence of catabolic repression. A comparative study showed that in a solid state fermentation system (SSM), even in the presence of high levels of glucose, the production of α-amylase was 4-fold greater than that in a submerged system. High levels of β-glucosidase and xylanase activities were also found in SSM after 72 h incubation. P. sanguineus produces at least three important hydrolytic enzymes using economical procedures.