Abstract: A high-efficient decolorizing fungus was screened from the product of solid state fermentation of waste tobacco stems and named as LY7. By its morphological and microscopic characteristics,LY7 was preliminarily identified as Penicillium sp. LY7 developed fast in water extraction of waste stems into mycelium pellets. The decolorization effect of inactivated LY7 mycelium pellets and the biosorbent powder prepared from that on Congo red as a targeted dye was investigated, respectively. The results showed that 96.4% of Congo red (100 mg/L) was removed within 3 hours by 8 g/L inactivated mycelial pellets under agitated condition,and 95.4% of that was removed by 1.5 g/L biosorbent powder in 9 hours. Method of producing biosorbent for dye-works waste water decoloration provided a new way for waste stem utilization.